How important is succession planning in your company? And what are the processes in place to assist your company in succession planning? -BT
Jul 23, 2009
The Business Times
Leong Mun Sum
Leung Kai Fook Medical Co Pte Ltd
SUCCESSION planning is a very important topic for Leung Kai Fook. The business founded by my father in 1928 has been able to grow with the joint contributions of our second-generation brothers. We understand each other well and trust each other’s competence. This gives strong empowerment to my brother, the chairman, and myself, as managing director, to move fast in making business decisions. Ongoing success depends on the ability of the next generation of leadership to maintain this winning formula of competence and trust.
As a traditional family, sometimes the culture of respect for elders and each other makes family members reluctant to voice their ideas or concerns. In order to open up the communication, we decided to get outside help. We engaged UBS Family Advisory Services to run a dedicated workshop for our family to kick off our succession planning. Fourteen family members from the second and third generation participated.
The success of this first workshop has encouraged us to think about drafting a family charter and creating a family council. We will also look at structuring our shareholdings in a way that supports business growth. With this, I believe we can achieve our most important goal: preserving the unity of the family, and happiness and well-being of each member.
Innoplan Technology Pte Ltd
THOUGH Innoplan is founded as a family business, we are only in the first generation of the business. Like most SMEs, we are also concerned about succession issues. Hiring experienced and talented staff has been tough in the last few years. Hence, our CEO has taken various steps and processes to gain insight into succession planning.
He has hired qualified consultants to groom key management staff in order to familiarise them with the finer points of leadership.
With the key personnel in place, an organisation chart was communicated to give a clear understanding of each person’s roles and responsibilities as well as to exploit the strength of the family’s values and talents. This allows them to begin setting future goals and objectives for themselves. Besides, it also eliminates any speculation as the family and the management team will be aware of the company’s business succession plan and who will take over as owner and head of the company and why. Our CEO feels that sharing the business succession planning process with his family members saves a lot of concerns.
Tay Chin Ann
Bio-Design Pte Ltd
I STRONGLY feel that succession planning is crucial for the smooth functioning, growth and stability of my company. We are implementing a succession planning process to ensure that the company operates smoothly with proper workforce management and that talented personnel and managers are groomed to support the company’s growth. Effective succession planning should be an ongoing process rather than something you look at only during the annual planning exercise. People are our most important asset. There will be minimal disruption to business when someone resigns because a potential replacement has already been identified to assume his or her responsibilities. To implement succession planning, we have adopted a few measures such as revamping our corporate identity and marketing materials, instilling stronger core values, skills and managerial training, staff appraisal, and applying for relevant certifications for health and safety standards. With effective succession planning in place, employees will stay motivated and will be ready to help move the company forward.
Dashmesh Singapore Private Ltd
SUCCESSION planning is one of the top priorities at Dashmesh Singapore. We have been able to identify and mould one for the top job eventually. We are even looking further ahead by preparing employees in their 20s and 30s to take up key positions in 3-5 years. The key to succession planning is a sound corporate entity and a clear mission. When this is taken care of, good candidates who join us can be identified as next- generation managers.
We will not be disappointed if such staff do not meet the standard eventually or choose to leave the company. We take pains to inform our staff that we are always on the lookout for the right candidates to take the express route to management and supervisory levels. What sets them apart is their passion, hard work and tenacity, which can be clearly observed over a period of time.
WMRC Pte Ltd
SUCCESSION planning is a key consideration for a boutique executive search firm like WMRC, as there is a strong need to ensure the business continues in the face of sudden change or routine renewal of the management team. Our work centres on finding the right talent for our clients and, in a similar manner, we constantly assess the risk factors that could affect continuity and our performance. At the end of the day, we are not interested in simply planning per se as we believe that what makes the difference is how we develop our people to take on larger and more important roles. We constantly ask ourselves what the consequences would be if our key people were no longer there doing the work. We develop our consultants in a way that prepares them to operate effectively, which essentially covers the full cycle of executive search. Our key people are expected to be experienced and well-versed in every aspect of our business, so that even if one person resigns, there is smooth continuation. One aspect of succession planning that is harder to manage is human relationships as it often takes time to develop, and works differently with different people. What matters most is inculcating values of openness, integrity and professionalism that should ideally form our DNA capable of transferring to the next generation.
Chief executive officer
HutCabb Consulting Pte Ltd
AS today’s business cycles are challengingly shortened and varied, the profile of today’s successful business leader does not readily present a set of criteria for the selection of his successor.
The crucial moment of succession and the incumbent state of dynamics are two crucial aspects to consider when handing over the baton. The better game plan is to keep a council of second-in-charge with a diverse base of talents. Each member can be put to the test and considered for succession; anointment of the deputy leader to succeed at the helm should not be guaranteed. As the business moves through changing paradigms, the corresponding set of leadership skills become essential to lead the organisation. Finding a ‘general manager’ to lead the organisation would no longer suffice for today’s SMEs to succeed.
HISAKA Holdings Ltd
IN every organisation succession, planning for critical roles is very important. Our company does not have any formal succession plan in place but we do adopt periodical review of our current top executives and those in the next lower level to identify suitable back-ups. These back-up candidates would have been with the company for a while and must have certain leadership traits. We constantly train these candidates so that they can be groomed to take on top executive roles when the need arises.
HSR Property Group
THE first step to succession planning and business continuity is great leadership. The litmus test of our leadership is our ability to build width and depth of leaders in our organisation. ‘Width’ refers to the number of leaders and ‘depth’ refers to the levels of leaders. We believe that the more we develop others, the more we will develop ourselves. The more leaders we develop, the better leaders we will become.
That’s why we run more than 25 proprietary courses totalling more than 500 man-days of ISO-certified training per year for staff and advisers. We have more than 10 training and coaching rooms, and continue to invest in more and better training resources to help produce leaders to take our 8,000-strong organisation to a higher level.
As the fourth CEO of the company, I am proud to say that should I be absent from the company for whatever reason, there will be at least two persons who can lead and manage the company. There will also be replacements for key positions in our management team. By aiming to be dispensable, our key managers have become indispensable to us.
The Ad Planet Group
OUR group has put in place a clear mandate on succession planning. All our managing directors are always on the lookout for potential successors who are exceptional practitioners in our discipline and who believe in our group’s manifesto and brand. In our planning process, we look for young talents who typically will be in his or her early 30s. They are expected to give our group what I would call ‘new and young energy’ and will help us get into new and exciting growth curves. Our first consideration for possible candidates will be organic, and then to look outside and within our industry. We currently have a layer of possible successors who are being groomed. But it is an evolving process as the success of our group in the future will be determined by the quality of the next generation of our leaders.
Motor Image Enterprises (Subaru)
EVEN though we are a young company, we have always included succession planning in our business plans. However, due to the recent economic situation, we have begun to look at it more seriously. For a start, we have looked into retention planning for the long term, identifying key personnel who would be able to effectively ensure the continuity of the business and who could be the spokesmen for their respective business segments. These are key personnel who have been with our company for a good number of years. In case of an emergency, we have also put in place certain key personnel who can immediately take on and continue with the smooth running of the business. We do place great emphasis on succession planning as this would help ensure that our business interests are well looked after over a long period of time.
Xmi Pte Ltd
WE are a young company and so succession planning is more focused on key positions. For every key position, we have to ensure that the second in line is always capable of independently managing the day-to-day operations of the department. This will allow top management personnel to take on visionary and expansionary roles for the company while ensuring that the next in line is nurtured and evaluated over a longer period.
We are constantly seeking new talent with strong leadership potential to bring our business to the next stage. As we grow in numbers, we have adopted a system of meritocracy through quantifiable variables and incentives. This ensures general productivity consistently and allows the management to identify potential candidates for key leadership positions.
Managing director (PowerPRO)
Pursuit Pte Ltd
WE are slowly putting in place an operations framework which will allow the business to continue to function seamlessly in my absence. It includes setting up business processes and best practices that govern the conduct of staff and the running of the business. The processes are properly documented. They are simple and clear, and we conduct in-house training to ensure that our staff understand them and are committed to them.
We have a simple HR programme that includes mentoring and grooming of young executives, an open performance evaluation system and empowerment of staff to assume multiple functions. I expose my operations director to the commercial aspects of the business by involving him in negotiations, marketing and customer relations management so that he can take over in my absence.
Senior vice-president, Asia-Pacific
SUCCESSION planning is an integral part of business planning. The globalisation of the economy, work, and workers is challenging many organisations – both large and small – to re-examine how they build their leadership bench strength and talent pipeline. Organisations are competing over the same small pool of talent and this will intensify as the economy recovers.
Succession plans that introduce a variety of cultures, viewpoints, and work styles are critical for organisations to be successful in the global marketplace. Organisations should create an infrastructure that enables mobility, utilises these differences, and promotes open and effective communication across different cultures and even across generations. In addition, organisations need succession plans that create a more diverse and flexible leadership and management team, even when doing so may create change and disruption.
With the increasing speed and scope of globalisation and the next generation of future leaders already a part of the workforce today, organisations need to consolidate their available talent to enhance their competitive advantage. A talent pipeline must be built from within the organisation to foster, train, and nurture leaders and leadership skills right from the beginning of an employee’s career to ensure the continued growth of the organisation.
FOR Pinnacle, it is critical to entrust the business to someone who is not only able to grow the organisation, but also maintain the company reputation with key stakeholders. Other than the training and development courses which we have invested in our senior executives, we also conduct regular performance reviews and discussions with our staff to understand their progress so as to be able to provide a fair assessment when the time is ripe.
Succession planning is not a stand-alone strategy. It must have all the essential support structures in place to set the trajectory of the company, without which any plan would prove futile.
Dr R Theyvendran, PBM
Stamford Media International Group of Companies
WE have taken succession planning seriously this past few years. My only son, a University of Bradford-trained engineer, was appointed CEO in 2009. Prior to that, he started from the ground and is familiar (on a person-to-person basis) with some of our hi-tech machine manufacturers. During the past nine years, he has literally acquired a ‘hands-on’ experience of every division and process.
In our company, the key divisions are operations, finance and administration, marketing and human relations. Marketing is a crucial area since every business exists mainly for its customers.
All these above-mentioned sections should be ‘properly anchored’ by like-minded directors and capable managers, with successors ready to step in, in case of any emergency. The potential successors are further encouraged to find capable subordinates and understudies.
Another reason we started early in the succession planning is because we just wanted to make certain that all our stake-holders get a feel of the present successor and how he runs the business, which currently is much more diversified than what it was when we took over the company in 1982.
There was also some subtle pressure from our associates and partners from India and Sri Lanka. They are realists and wanted to know with whom they could continue doing business in case of any unforeseen occurrence or accident.
At the same time, by starting early, the successor was given ample time to get to know the ropes and build up his own core team of competent lieutenants. Phenomenal changes are taking place in the industry particularly, as well as in the world of business generally, and he must be well-prepared.
We practice an objective-oriented, open management style from the helm – right down the organisational and administrative hierarchy.
Succession planning includes continuous recruitment of the required talent as well. We place a lot of emphasis on the selection process. Those with good work attitudes are given preference. Some are sent for further specialised training and then put on a company bond for three to five years.
Once a person has been selected – be it as a section manager or a production manager, the person is monitored to ensure that it is ‘a good job-fit’ and the performance is as required by industry standards.
We value all our staff. As such, constant motivation and encouragement of our people to do their very best is part of our corporate mission.
This article was first published in The Business Times. Link
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