Healthcare Financial Management (cover article)
The Practice of Succession Planning
The objective of Succession Planning is to provide continuity of management to ensure that organization has the right leaders in the right places at the right time. Essentially, it is about how to plan and align human resources with the overall business planning process. Succession Planning (or Management Continuity Planning), as part of HR Planning, is about preparing successors to assume key roles within the business, particularly during critical points of a business' growth and development cycles. At its most fundamental level, succession planning is a highly strategic undertaking because the time horizon associated with managing the development of talent typically is long.
Why is Succession Planning an important undertaking? The tracking of personnel development and career potential should be no less important to an organization than any other type of asset management. Boards frequently review corporate assets and investments to make sure the organization is on sound financial footing and the financial future is, to the extent possible, determinable. The management of human capital is no less important to the long-term viability of the enterprise. Yet, only a small percentage of companies give this the attention it deserves. For example, a 2002 study conducted by Hewitt Associates found that 73% of the 240 major U.S. companies reported that they had a defined succession-planning process in place; yet, only 13% said that their organizations always follow their succession plans when making selection decisions.
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