Creating a talent pipeline

After you know what a job needs, you must find the best person for it. A key part of planning for the future is to have a strong group of people ready to take on leadership roles when needed.

This means looking at people who already work for you and people outside your company. You should have a plan to find and judge possible replacements.

Internal vs. external Candidates  

When you are picking someone to take over a job, you can choose someone who already works for you or someone new. Think about your current employees, what they are good at, and how they can grow. Use your current workers as a starting point to see who else has the work habits and responsibility you need. Letting your employees know you are looking within the company can make them feel better about their jobs and want to stay longer. On the other hand, new people from outside the company can bring fresh ideas and ways of doing things. Consider both approaches, as each offers distinct advantages and considerations:  

Internal candidates  

Internal candidates are individuals already working within the organization who possess a deep understanding of the company's culture, operations, and values. They offer several advantages for succession planning:  

• Familiarity with the organization: Internal candidates already know the organization's processes, stakeholders, and goals, which reduces the time needed for onboarding and adaptation. 
• Provides an incentive to stay: Recognizing internal talent and providing growth opportunities can serve as a powerful incentive for employees to remain committed to the organization. 
• Higher probability of success: Internal candidates have demonstrated their capabilities within the organization, giving them an advantage in assuming leadership roles.  

External candidates  

External candidates, on the other hand, bring fresh perspectives, experiences, and skillsets that can invigorate the organization. They can offer a valuable infusion of new ideas and approaches, which may be particularly beneficial in times of change or transformation.  

• Fresh ideas: External candidates may offer innovative solutions and novel approaches that challenge the status quo. 
• May lack internal depth: While external candidates bring diverse experiences, they may take some time to familiarize themselves with the organization's unique dynamics and culture. 
• Lower probability of success: The success of external candidates may be less certain compared to internal candidates due to the learning curve associated with joining a new organization.

It is important for organizations to have both internal and external succession plans in place. By considering candidates from both groups, organizations can maintain flexibility and preparedness to meet unexpected challenges or opportunities.

Additionally, business owners should develop a plan for their own succession. Contemplating how and to whom they might sell their business ensures a well-structured exit strategy and secures the future of the organization.

A scorecard is a research-proven tool that facilitates effective and impartial assessment of potential candidates for leadership positions. By assigning numeric values to specific capacities, experiences, and skills needed for the position, the scorecard quantifies the requirements and expectations for potential successors.  

Key components of the scorecard  

• Listing key experiences or resources: The scorecard should include 5-7 key experiences or resources that a successful candidate for the leadership position must possess. These experiences should directly align with the role's responsibilities and requirements. Use your Knowledge Capture © matrix to help identify these exact requirements. You can follow a similar scale of generic to specific responsibilities to match a candidate to your needs more closely. 
• Specificity and points allocation: The scorecard should be specific, avoiding generic descriptions. For example, instead of stating "should know budgets," the scorecard could specify "has created budgets for centers with a budget of $500,000 or more." Each experience is assigned a specific point value based on its importance to the position. Items of higher importance have larger point values while more minor requirements have lower point values. 
• Quantifying the position: The scorecard provides a tangible measure of the leadership position's requirements, making it easier to compare and assess candidates objectively. While the human element of hiring is an important factor to consider, using the scorecard can help prevent our emotional decision making from taking the forefront. 
• Identifying areas for development: By using the scorecard, potential candidates can identify areas in which they may need to further develop their skills or experiences to be more competitive for the role. Use your scorecard as a means of reporting these areas to potential candidates. The more aware they are of their own strengths, the better they can serve an organization.

Utilizing the scorecard for succession planning  

The scorecard serves as a valuable template for assessing both external and internal candidates. For example, organizations can use it to identify areas where an internal candidate may require additional training or exposure to meet the position's requirements. Use this assessment to guide professional development efforts.  

For instance, if an assistant director lacks experience in financial management, the organization can provide opportunities for her to attend relevant training courses or involve her in financial decision-making processes to enhance her skills.

Having a mix of current employees and outside candidates makes sure organizations are ready when leaders leave. Using a scorecard to fairly judge possible replacements helps find the best people. Then, you can create plans to help them learn and grow. Good succession planning keeps the organization running smoothly. It also creates a work environment where people can learn and move up, which attracts good workers and keeps them around for future leadership roles. To start planning the actual change, read Part 4 of this series.

Disclaimer

The information contained here is for educational purposes only and is not intended to constitute legal, tax, or financial advice.