Most organizations realize that success is heavily based on having the right people with the right skills in the right positions at the right time. However, few have found ways to consistently develop and maintain succession planning processes with positive outcomes.
Don’t take my word for it. There are a myriad of studies and research papers out there that back this up. Go back over a 20-year period, and the numbers and conclusions are startlingly similar year upon year. According to a survey from AMA Enterprise polling of 1,098 senior managers and executives a quarter of the participants say their company does not have a succession planning program. This is in spite of the undoubted understanding of succession strategy’s importance to the future of the business from the leadership layer.
Why are successive leaders failing to address this? The reasons are many and varied, and the gap between intent and reality has been widening. As a mentor of mine once said, “Capability development is a long-term investment, and many companies trade in short-term decision-making.”
If you are in the oil, gas, or energy sector, here are some of those realities:
- Fifty percent of the workforce is due to retire in the next 5–10 years.
- For every two people retiring, there is only one new person entering the workforce.
This is further compounded by huge demographic gaps in the ages of the workforce. A workforce that is also now being challenged by an influx of new technologies. A workforce that, until recently, still uses techniques honed in the 1950s and uses technologies put in place in the 1980s. The degree of difficulty is further exacerbated by recent studies that 28 percent of millennials would consider staying at their current company beyond 5 years.
So who is responsible for capability development and succession planning? HR? Learning and development? The functional business leaders? Well, the short answer is that everyone needs to play a part. Throwing people into training classes and hoping for the best is not a strategy.
Evaluation, education, exposure, and experience are words more likely to be fused together these days to create a more effective learning experience. And this is not the responsibility of just one department.
We are beginning to see the creation of departments, with names like Operational Excellence and Continuous Improvement, that are responsible for lowering operational risk and operating costs, and increasing revenues. In most instances, there are fine margins at play. To paraphrase Susan Rice, unlike 30–40 years ago, the majority of the assets in the organization now resides in the knowledge and ability of its people—not just equipment.
As a result, the early adopters and leaders in this area have shown the way forward. There is an understanding that the management of the business and operational processes relies heavily on investment in developing the right culture and a pool of talent with skills and qualities that cover a spectrum of disciplines. Words like transparency, accountability, and advocacy are no longer platitudes erroneously and mysteriously woven into the mission statement. Although these leading organizations employ various methodologies such as Six Sigma and lean, the culture they are seeking to emulate is built upon the guiding principles developed by the United States Navy’s Nuclear Program. The objectives are long term, but the focus is developed through the execution of short-term goals.
There is no doubt about it; building out a succession strategy, while worthwhile, means answering a great many “what’s in it for me” questions along the way. But any aspirations of a stronger, future-proofed workforce are going to require that the organization finds these answers. How well an organization manages these human factors will have a significant impact on its ability to effectively manage the future safety, productivity, and profitability of the business and its assets for years to come.