The advancement of technology imposes daily challenges in relation to the way you handle your business. In the midst of all this, a question arises: how do these changes reflect on business transition planning?
While many traditional companies have embraced the need for change in their functional leadership, few have established business transition plans that place technology and transformation at the center of the process. But in fact, for these companies to survive, they need to adjust the current workforce and modernize succession planning.
In ten years, the CEO of a company is likely to be someone who grew up with smartphones and social media, playing a critical role in their daily lives. This leader will certainly consider the business model he inherited obsolete. Additionally, executives also cite a lack of adequate leadership as a major impediment to achieving their business transition objectives, according to a recent survey. Only 35% of those executives reported having the talent in leadership positions to meet their transition needs.
The digital economy imposes unprecedented pressure on companies. The workforce and its expectations are dramatically different and will continue to change. The traditional approach will not meet business growth priorities, satisfy employee engagement and development needs, or create a sustainable next generation of leadership.
Some questions are important when evaluating how to incorporate workforce changes into your transition planning strategy. One of them is whether the leadership has identified a lack of skills and is developing its people. Many gaps in leadership capabilities pose problems for future growth. This leadership gap is increasing as existing leaders are not equipped to lead a diverse workforce and the millennial workforce still lacks the skills and capabilities needed to lead at those levels. It must include the identification of necessary future skills and capacities, in addition to the development necessary to close this gap.
Another necessary question is whether leadership is identifying and taking advantage of the five generations of talent. For the first time in history, the workforce is comprised of five generations working side by side. A new generation of executives is emerging in the corporate world. Millennials are already the largest group in the workforce and hold nearly 20% of executive positions. In addition, people are living and working longer. Never in history have we employed as many older workers as we do now. Careers just aren't viewed the same way as before. Today it is common, for example, for a young employee managing someone who is close to retirement. And many organizations focus solely on millennials. However, the strategy involves the dynamics of these five generations, which have different levels of digital capacity. There are significant differences in the way these generations view technology, processes, and digital transformation.
Considering employee performance is also important in the business transition. Next-generation leaders expect more mobility across the organization, as well as transparency about their potential and career growth. Companies are moving to continuous performance management and it is necessary to manage individual performance differences found between different employees working in the same group. Succession and career development play a central role in this “new” value proposition for employees. A robust and transparent succession plan can help you retain employees, plan for future growth, and reduced capacity gaps.
Another important point in the transition planning strategy. What is necessary for the company to be able to leverage data and analysis, in order to expand its leadership strength? Today, organizations that use quantifiable metrics and benchmarking in their workforce outperform those that don't. Leaders need to know who their employees are, what skills and abilities exist or are lacking, to make key business decisions based on factual data in real time. Modern succession planning must leverage technology, real-time data analysis, and data insights to create a database that can help organizations grow and sustain their success.
Finally, it is worth questioning whether the succession strategy is linked to strategic objectives and financial performance goals. The organizations that are most effective in building a sustainable leadership pipeline modernize their succession planning, incorporating it into their business strategy. There is a significant difference between a succession approach more focused on replacement planning, than one guided by strategic objectives, predictive analytics, and a focus on investing in future leadership talent. Companies need to look at growth targets, financial commitments, upcoming market expansion plans, etc., and then proactively structure their talent pipeline.
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