Chapter 22 How to Implement a Business Succession Plan

In recent years, represented by GE CEO Welch's resignation and the new CEO Immelt's successful administration, the theory of systematically looking for the successor of the top executive for the organization has gained rapid popularity in the West. Develop and mature in practical implementation.But in our country, due to the influence of traditional culture on corporate culture, companies have never had the habit of openly discussing and formulating succession plans.Discussions on corporate succession planning by Chinese business circles and economic theory circles originated in 2004, when many "sudden retirements" and accidental deaths of entrepreneurs occurred in Chinese companies.These companies suddenly found that they did not have a leader with sufficient ability to take the helm and lead the company to continue to run. The resulting internal and external shocks of the company were not trivial, and the lack of succession planning of Chinese companies was also extremely prominent.The survey shows that more than 90% of enterprises in China do not have a clear succession plan and lack a scientific successor training mechanism.In addition to the general lack of awareness of successor training, Chinese companies also have a series of problems such as the poor quality of successors, the division of family successors, and the inability of high-level successors to escape the control of their predecessors.If the topic of successors was just a concept a few years ago, now the issue of "successors" has become a top priority for many companies.

Enterprise succession planning means that the enterprise provides human capital for the sustainable development of the company by identifying and continuously tracking high-potential talents in key positions (internal talents with the potential to be qualified for key management positions), and developing and cultivating these high-potential talents effective safeguards.This method of effectively obtaining organizational human resources through internal promotion is a long-term systematic project, which requires enterprises to carry out scientific and systematic planning.Research shows that China will face a shortage of 70,000 senior management talents in the next two years, and as many as 89% of enterprises will find it difficult to find qualified high-level successors.As the so-called "everything is forewarned, it will be established, and if it is not forewarned, it will be abandoned", the selection and training of successors should be done sooner rather than later.Experts suggest that companies should start implementing high-level succession planning at least four years before the current top managers plan to retire.Welch, the former CEO of General Electric, spent seven years mulling over his successor.Nestlé CEO Bao Bida has been training successors since his first day in office.Mao Lixiang, the founder of FOTILE Group, started training and educating his son Mao Zhongqun seven or eight years before he took over, so that he could be on his own as soon as possible.

The future of an enterprise cannot be brought to its destination entirely by today's leaders, but by future leaders.Before considering who to choose as the successor, where is the successor and how to find the successor is indeed an unavoidable problem.Looking at home and abroad, there are roughly two types of successor selection models: either endogenous, including clan succession, training and promotion from outstanding employees, etc.; or introduction, such as the introduction of experienced professional managers.The two modes have their own advantages and disadvantages and applicable conditions, and there is no clear distinction between advantages and disadvantages.

1. Endogenous successor selection model The endogenous model of selecting successors from within the enterprise or within the family has its unique advantages: First, successors cultivated by the enterprise itself or with blood ties are relatively more loyal to the enterprise.Managers who can become successor candidates are mostly outstanding employees who have worked in the company for a long period of time, or have a blood relationship with the founder, and their loyalty is relatively high.Once these successors become the person in charge of the enterprise, because their fate is closely related to the development of the enterprise, they will persist in devoting their brains and energy for a long time.However, once an introduced successor fails to take root in the company due to cultural identity or other reasons, there is a greater chance of choosing to leave.

Second, endogenous successors have a deep understanding and operational capabilities of their industries and companies.The competition in the modern market is relatively fierce, and the professional division of labor is very detailed.Interlacing lines is like a mountain, and it is still very difficult for laymen to direct experts.The successors cultivated within the enterprise generally come up step by step from the grassroots level of the enterprise.He is well versed in the operation of the industry and has sufficient resources in the industry.For example, we have close ties with suppliers, customers, and financial institutions.Therefore, it is possible to mobilize resources, lead the development of the enterprise relatively easily, and shape the competitiveness of the enterprise.

Third, endogenous successors can maintain the continuity of corporate strategy.Before retiring, many CEOs have taken a long-term view and formulated the development direction and goals of the company, but due to reasons such as health and age, they cannot continue to implement them.He also very much hopes that the next successor can continue the existing route and not easily change the development direction of the company.In this regard, internally trained successors are more likely to understand and implement the intentions of their predecessors. Fourth, endogenous successors are more likely to work within the enterprise due to sufficient interpersonal resources.Internal successors have certain prestige within the company and are familiar with corporate culture and internal rules.The introduced successor may be more capable than the internal successor, but there is a risk of resistance within the company for his behavior.

When an enterprise is in the following situations, it may consider adopting an endogenous successor selection model: The industry where the industry is changing is relatively slow, and it is an industry with stable development, and the company has established a relatively leading position in the industry; the company's development strategy is very clear, and all internal levels have a deep understanding and recognition of strategic goals and corresponding action plans ; The company has a relatively mature talent reserve and training mechanism, and its internal talent resources are relatively rich.

2. Introduced successor selection mode Similarly, the introduction-based successor selection model also has its advantages: First, because most of the external successors introduced are experienced experts in the industry, the comprehensive ability and experience of the introduced successors may be stronger than those of the endogenous successors.Under normal circumstances, the introduced successors have many years of experience as leaders in large enterprises, and some of the introduced successors have had very brilliant performances.And the endogenous successor may be the second or even the first person in charge of the company.The position is different, the angle of thinking about the problem and the comprehensive ability are different, which is the weakness of the endogenous successor.

Second, the introduced successors may have special abilities that the endogenous successors do not have.When an enterprise faces major changes, such as rapid expansion of scale, changes in operation methods, changes in business areas, major changes in market demand, etc., the enterprise will have special requirements for the quality and ability of successors, and needs to be able to deal with such changes competence and experience of external entrepreneurs. Third, the introduced successors will bring a brand new perspective, less constrained by the various intricate interpersonal relationships within the enterprise, and have greater courage and boldness to carry out reforms when the enterprise is in crisis.

When the enterprise is in the following situations, the introduction-style successor selection mode can be considered: When there are great changes in business activities, when there is industry consolidation, when a major crisis occurs in the enterprise, the enterprise may face a situation that has never been experienced before. At this time, it is necessary to introduce successors with rich practical experience and good performance from outside to help Businesses deal with chaos and crisis. To sum up, regardless of the nature of the enterprise, successors are either endogenous, including family inheritance, training and promotion from outstanding employees, etc.; or they are introduced, such as hiring professional managers from outside.The airborne troops are faced with the problem of whether they can "water and soil charm", and the successors promoted internally will have the worry of "inbreeding".In fact, many world-renowned large companies have always adhered to the tradition of endogenous successors, but at the same time they did not refuse excellent foreign aid.Therefore, there is no absolute model on the issue of successors.Regardless of whether the successor is endogenous or introduced from the outside, it is possible to make the company move forward smoothly or survive a desperate situation, or it may lead the company to the abyss.And just as a management guru said: "It is not important what kind of person you choose, what is important is what kind of system you use to choose." Managers are not born, they need continuous training. The reason why GE and other "hundred-year-old companies" are evergreen is that they have a complete set of successor training plans, not only for training the president, but also for the successors of various management positions. human resources.

The enterprise's development and cultivation of successors should be closely integrated with the enterprise's overall business strategy, because the business objectives of the enterprise are constantly evolving, and the required leadership skills will also change accordingly.Therefore, the implementation of the succession plan mainly involves the following six basic tasks: 1. Establish a database of senior management personnel skills.It is necessary to clarify the company's business strategy and long-term and short-term goals, and determine the quality and capabilities of the company's future senior management personnel based on the company's business strategy and the quality and capabilities of the existing senior management personnel. The skills designed here are not only It is a category that is generally understood, and factors such as personality, temperament, decision-making, judgment, performance, and "soft skills" that cannot be reflected on a resume should also be included.For senior positions, leadership skills are much more important than technical skills. 2. Prepare key high-level job descriptions and define job responsibilities.Current job responsibilities should be clarified, and future responsibilities should be defined in light of foreseeable business and technological changes.The required skills should be categorized in order of importance, and problem-solving skills and personal characteristics should also be taken into consideration. 3. Employee skill assessment and skill development needs.By evaluating the skills of employees, find out which of the existing personnel may become the future successful leaders of the company, lock the best future leaders in these companies, and invest enough resources to cultivate them.Because all succession planning assumes that vacancies caused by senior management changes or adjustments will be filled by people from within the business.Therefore, planning must first identify the training needs of the employees to be included in succession planning.The company regularly deploys lock-in candidates to meet one challenge after another, while supporting their development through a series of formal leadership training programs.The company's senior managers should also provide them with additional guidance to help them make up for deficiencies in skills and experience.The success of succession planning depends on the ability of the management team to actively and effectively promote candidates. 4. Develop a set of systematic, continuous and fair evaluation criteria to periodically assess and evaluate the quality and various abilities of these training objects.Judge whether they really have the personal qualities of an excellent leader, whether their personal knowledge and ability have been improved, and whether it is necessary to adjust the leadership training program.On this basis, the training objects are adjusted accordingly, unsuitable candidates are constantly eliminated, and new candidates are constantly added. 5. According to the assessment and evaluation results, select key training objects.Make sure they realize the importance of their own development to the future of the company and give them more opportunities to exercise. 6. Let key trainees audition for leadership roles.At this stage, the existing senior leaders should play an active role in the development of these high-potential talents. They should often contact with these key training targets, and let these people have a deeper understanding of the company's strategy and business goals. For a succession plan to be successful, it must be consistent with the human resource strategy and organizational development of the entire enterprise.In addition, the existence of the succession plan does not guarantee that the trainees will be promoted, but this is very easy to be misinterpreted, and the trainees need to be clear about this.Furthermore, the selection criteria for successors need to be consistent to a certain extent, but they must also be flexible due to job requirements.For example, there should be a difference in quality requirements between executives in charge of marketing and those in charge of human resources. What needs to be pointed out in particular is that in order for an enterprise to become a "century-old store", in addition to training and selecting successors for high-level management positions, it also needs a large number of middle- and low-level management talents who can recruit and fight well.Enterprise management should be a pyramid structure. Only when there are competent managers at every level from the bottom of the tower to the top, can the enterprise go from good to great.The rupture of the back-up management may lead the enterprise to the abyss of failure.In this regard, Big Blue IBM's succession plan - "Long Bench Plan" has accumulated a lot of valuable experience in the issue of handover and talent echelon training, which is a very useful reference for Chinese enterprises. IBM incorporates succession planning into its comprehensive training system, and begins to examine employees' potential as successors as soon as they enter the company. IBM's succession plan includes all important positions above the director level, and selects a succession group rather than targeting a small number of positions.For example, every year, the human resources department of IBM Greater China and the CEO of IBM Greater China discuss more than 40 successors.It is precisely because there are enough candidate successors that IBM can ensure that the company's back-up management is not broken, and it can continue to cultivate excellent senior management talents. Therefore, the success of an enterprise's succession plan depends not only on the cultivation and selection of top management personnel, but also on the formation of an effective successor system and the establishment of a complete successor training system from the bottom to the top. Successor planning is a persistent long-term operation, continuously reinventing managers, and then selecting the best from the best, selecting the best from the best, and determining successors, in order to truly cultivate and select excellent successors, forming a continuous process from the bottom to the top. The back-up management chain realizes the smooth transition of personnel replacement at all levels and ensures the evergreen foundation of the enterprise.