Succession Planning

Executive Summary

In this executive summary, I will briefly discuss the success of a business enterprise, among many other factors, which depends on effective planning and strategy formulation with respect to its future. In this respect, a strategy to identify and develop individuals with the aim of promoting them on to positions when they become vacant is of significant importance and is commonly referred to as succession planning (Weisblat, 2018).

The importance of succession planning is evident from the fact that, aside from the natural retirement, when top management personnel is deceased, for instance, an organization must fill the gap with an immediate successor to at least ensure that the business does not go off the track. However, in the absence of a competent successor, the ship could end up sinking on its own (Weisblat, 2018).

Although succession planning for incumbent executives and management demands a selfless attitude and vision, the reality, however, does not portray so. It is a common practice among board members of large business entities to rather look outside their organization for leadership just for the sake of avoiding conflict. An ideal organization would groom its successor internally based on the premise that the individual being developed is aware of the culture, the human resource of the organization, and the management (Weisblat, 2018)..

On the other hand, the employees and management would also be able to relate to the successor because he would be one of them and not just ‘imported’ and ‘imposed’ on them. One other big advantage of succession planning, which is often overlooked, is that it promotes healthy competition among top executives of an organization (Weisblat, 2018). It motivates them to work in the best interests of the organization and thereby increasing their chances of being a succession.

Following Fayol (1918) invention of succession planning, organizations have identified the need to engage in succession planning. After his discovery, other authors, including Rothwell 2015) and Blaskey (2002), made their contributions to the study. Others includingLegris, McNamara, Koehn, and Khan (2014) and Gilmore (2012) advised the public on the essential practices that can assist an organization in avoiding the consequences of poor planning and lack of efficient succession planning.

Abstract

Effective planning is an aspect that cannot be ignored when it comes to the success of an organization. As part of planning, organizations should take time to identify and develop individuals with the ability to run an organization as part of succession planning. This study attempts to reveal the importance of succession management programs and that companies can develop an effective strategy by overcoming the challenges involved in succession management. The researcher has set out to analyze different authors who shined a light into the subject of succession planning in a bid to identify how succession management can improve business performance. Extensive research has been conducted since the idea of succession planning was introduced by Henry Fayol in 1918. Through in-depth analysis, Fayol influenced Rothwell to analyze the importance of succession planning in contemporary planning. Researchers engaged in surveys and interviews with different business leaders and talent managers to understand the practice and implementation of succession planning in organizations. This research is important as this reveals why most companies struggle with the implementation of succession planning, although there are great opportunities that exist with the practice. The researcher will begin by evaluating the first peer-reviewed study in succession planning and the contributions made by the authors in the industry. The learner will also identify the differences that exist between the first peer-reviewed article and the latest peer-reviewed article on the topic of succession planning.

Introduction

Successional Planning has received a significant amount of attention in the literature. Many articles, texts, and journals have explored many different themes, locations, and timeframes associated with this topic; it is therefore not surprising that scholars and practitioners alike have come to different conclusions about the nature, role, and contributions of Successional Planning. This study will focus on the effects of many organizations facing financial collapse in the United States, during the period 1996-2008. To help ensure a common understanding of this research-focus, key terms and terminology most applicable to this theme, place, and timeframe will be highlighted. Crucial issues and rationale for the additional study will also be provided. Pertinent sources in the literature will be identified and summarized to explain their purpose, methods, findings, and significance. Since every field of study is influenced by individuals and/or organizations, heroes and champions will be acknowledged. To help ensure academic rigor, those with critical or antagonistic views will be revealed. Finally, pertinent legal or relevant administrative considerations will be identified.

Key Issues and Reasons for the Study

The key issue/reason for this study is to focus on the importance of successional planning. More than half of today’s companies are not prepared to execute proper leadership or name a successor to their CEO should the need arise.

Succession planning is defined as a practice that is relatively routine and expected in the corporate and government sectors but has historically been problematic in higher education. Succession planning is considered the basis of how a company should prepare for staffing changes such as turnovers, retirements, promotions, transfers, leave of absence, and any unforeseen or foreseen vacancy in their organizational hierarchy. By making it part of an organization’s objective, CEO’s and other leading members should not have to worry about the success of their company. What has been discovered through research was that firms’ board of directors has the depositary responsibility to select their CEO’s but have failed to exercise their authority when called for.

Another key issue is that organizational Boards face when it comes to managing their CEO succession process. They normally lack in-depth knowledge of their firm and, most of the time, even their executives, while having to rely on the CEO for information about and access to succession candidates. Having a replacement plan that involves creating a list of short terms replacements for important jobs during a crisis, but ultimately an organization should design a well-developed business plan for their employees since it usually takes a long time to develop a well-qualified candidate to become a successor.

Key Terms and Terminology

While succession is defined as the order in which or the conditions under which one person after another succeeds to a property, dignity, title, or throne, it plays the key role when putting an effective plan in action for successional planning.  Succession Planning is identifying and developing internal people with the potential to be ready to fill key business leadership positions in any organization. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available.

When it comes to succession planning, one of the key elements is to always have a successful strategy. Strategyis discussed in this paper because it is the one key element that every company needs in order to run and continue a successful organization.  Not only is it important, but it is for successful succession and governance.  Strategy for succession planning is for determining how to use different approaches depending on different situations within an organization; this may involve moving staff around in a quick manner in order to expose them to a wide range of experiences and to possibly fill vacancies.

It is also very important to have some form of governance within an organization because it is considered the heard of any success within any Organization and fundamental to adopt good practices to include preserve and strengthen stakeholder confidence, provide the foundation for a high-performing organization, and to ensure the organization is well placed to respond to a changing external environment.  For short, it encompasses the process by which businesses are controlled, directed, and held accountable.  Doing this will involves proper leadership, accountability, authority, great direction, and a controlled organization.

When it comes to management, having the right people in charge of running a company and dealing with operations and people. Increasing focus on governance has prompted many directors not only to become engaged in their organizational management but to face several barriers when it comes to gathering and processing information.

Most Pertinent Sources in the Literature:

Gilmore, T. (2012). Nonprofit Quarterly. The Importance of Linking Leadership Succession, Strategy, and Governance., [online] pp.51-56. Available at: https://webster-illiad-oclc-org.library3.webster.edu/illiad/illiad.dll?Action=10&Form=75&Value=86140 [Accessed 7 Feb. 2020].

The importance of a board thinking about leadership succession has become a very critical task. Often, we frame succession as a foreground without paying any attention to the related background. Succession, most of the time, is intertwined with the state of the board’s functioning and the enterprise’s strategy. Working on governance is triggered by succession and liked to strategy in terms of new competencies that need to be on the board.  Three areas that strategy, governance, and succession need to go hand in hand one cannot focus without the other two.

In recent incursions of each of these professional groups in big businesses, firms are moving into onboarding and coaching, and strategy firms are beginning to address governance issues in the wake of the attention to the board (Gilmore, 2012).  This article offers a great overview of some of the challenges of sequencing issues from three groups of leadership, which are strategy, governance, and succession, which are linked in ways that often create the following three dilemmas.

The first dilemma speaks about the misalignment between the board’s readiness and leadership succession. Often, there is a long-tenured leader who leads to atrophy of the board’s vitality and increases its dependency, especially when the leader is successful. So, naturally, when an organization leader decides to leave on his/her term or even by the organization’s discretion, the board now must worry about how that role of the missing member affects the organization and how the members now must think about strategic shifts and the implications for succession (Gilmore, 2012). Leaders are often denial about when their effectiveness is losing its edge, and when is the best time to leave appropriately.

The second dilemma in this article is the misalignment of the strategy with succession. It has been discussed that in facing leadership succession task, there is a good enough strategy that is essential for a board to define the scope of the leadership role and to make a high-quality selection of a talented organization leader.

However, if there are any sort of grand strategic dilemmas, any outgoing leader, especially if the exiting the organization based on performance or a conflicted working alliance with governance, it’s not in the best position to support the board in working through its vision. The dilemma may be heightened if the leadership search is caused by major differences in opinion about the strategic direction of the organization among board members and candidates may be reluctant to apply under such conditions, and the board may have difficulty reaching a choice and supporting the new leader (Gilmore, 2012).

The third dilemma is the mismatch between the board’s capabilities and strategic development. In professional associations, people often have risen to governance as an honorific for long, distinguished service, which is usually well earned. However, when facing significant changes in the environment, such as new technologies, new delivery mechanisms, and different preferences in younger generations, the board may lack members with enough experience with these new phenomena, work that requires generative thinking. Strategy work involves thinking about future threats and opportunities and the need core competencies for the organization to succeed.

Legris, E., McNamara, K., Koehn, N., and Khan, N. (2014). Starbucks Coffee Company: Transformation and Renewal ^ 314068. [online] HBR Store. Available at: http://hbr.org/product/a/an/314068-PDF-ENG [Accessed 7 Feb. 2020].

Transformation and Renewal analyze the turnaround and reconstruction of Starbucks Coffee Company from 2008 to 2014 as led by CEO and co-founder Howard Schultz. This was accomplished by a great return to its core values, introducing new products, customer experiences, and organizational capabilities that are designed to ensure the success of the company will survive in a turbulent global economy. At a March 2008 gathering of 200 senior-level company leaders, Schultz unveiled a Transformation Agenda that included seven “Big Moves”:

·         Be the undisputed coffee authority;

·         Engage and inspire our partners;

·         Ignite the emotional attachment with our customers;

·         Expand our global presence—while making each store the heart of a local neighborhood;

·         Be a leader in ethical sourcing and environmental impact;

·         Creative innovation growth platforms worthy of our coffee;

·         Deliver a sustainable economic model.

The company closed stores, restructured its manufacturing and supply operations, and, perhaps most significantly, took steps to reengage its partners and store managers. In February 2008, Starbucks closed more than 7,000 of its stores across the country for “Espresso Excellence Training,” taking the time to work with approximately 135,000 baristas to ensure they could pour a perfect espresso shot and steam milk properly.

For Schultz, however, that wasn’t enough, he wanted to reach the company’s store managers, recognizing them as essential to the transformation process. Starbucks’ fourth-quarter profits were down 97% from the same time a year earlier; for the fiscal year, net earnings were down 53% to $316 million. The Starbucks board was reluctant to send 10,000 partners to New Orleans at the cost of $30 million.

Preimesberger, C. (1997). Steve Jobs Returns in 1997 to Revive a Moribund Apple. eWEEK at 30.

This article discusses how Steve Jobs, founder of computer company Apple, revived the company in 1997. Some of the topics that were discussed were the conflict between Steve Jobs and his successor, who was the former PepsiCo CEO John Sculley and the Apple board of directors. It also discussed the challenges that Apple had faced and how it was revived. During the years of Jobs’ absence, which was between 1985 and 1997, Jobs did not remain idle; he continued his entrepreneurial ways by founding NeXT Computer and the digital movie studio Pixar. Jobs later then said that he had learned how to be a real CEO in those years.

Meanwhile, Apple again went outside to hire former National Semiconductor CEO Gil Amelio to replace Spindler in 1996. However, Amelio couldn’t restore Apple’s fortunes, and perhaps his biggest contribution to the company was championing the acquisition of Job’s second computer company, NeXT, for $425 million in February 1997, bringing Jobs back to Apple. NeXT’s intellectual property became the basis for the iMac desktop computer. When the Apple board finally came to its senses later that year and convinced Jobs to return as CEO and to give him the authority to run the company as he saw fit, the fortunes of the company changed for the better.

Jobs obtained an infusion of cash from Microsoft and other investors. He led the development of the iMac with its landmark transparent PC casing design in multiple colors. He also started developing more connected products, such as the iPod and iPhone. Later, he started thinking about more ways for Apple to make money on the Internet. Jobs had learned the importance of tempering his obsession with control, and he was much better at empowering his talented employees to do what they do best. Without a doubt, this change in his leadership style is a very significant contributing factor in Apple’s return to the spotlight after suffering through some major setbacks during his absence from the company.

Once he returned, he led the charge on Apple’s new OS, which redefined how personal computers function, the iPod, which completely revolutionized the music industry, and the iPhone, which has been equally as important in the evolution of personal technological devices.

Heroes and Champions

Howard Schultz became a hero because he made a name for Starbucks and has proven that he is a true hero to the company by returning to save it. After the company took a great fall in 2008 with hundreds of stores closing, the stock dropped to 50%, and the increasing pressure from its competitors like McDonalds and Dunkin Doughnuts, Schultz came back to the company to bring it out of the depressing fall it was in. His main agenda was to focus on streamlining the company’s management; other agendas included improving the current state of the U.S. business, re-igniting emotional attachment with our customers, building for the long term, and expanding the company’s presence around the world.

Starbucks never actually competed with anyone before, but becoming very relaxed, the company has more than overlooked what is happening around. Different companies started to notice that the coffee business is very profitable to include McDonald’s and Dunkin’ Donuts. They were always willing to do anything to entice visitors: free coffee, coupons, etc. On the other hand, there were independent players who learned from Starbucks’ experience. They were promoting themselves under the slogan: “Support local businesses!” Starbucks was trapped in the middle

In order to save Starbucks, Schultz had to make several strict measures. To optimize the costs, the company closed 600 stores in 2008 and another 300 – in 2009. Today, all the efforts of the company aimed at overcoming the crisis and improving services.  In March 2008, Starbucks launched a rather interesting project on the Internet. Any person, whether he is an employee of a company or a customer, can share his idea of improving the coffee stores. Each idea will be discussed, and some may even be implemented. In fact, before the ideas reach the company, they are actively discussed by the visitors of the website, and, obviously, Starbucks considers only the most popular.

Steve Jobs is certainly relevant to the company because he was once ousted from Apple because of his leadership style and the loss the company was going through. In the beginning, Jobs was criticized for his leadership style in which he was known as a jerk; he caused a lot of stress to his employees and a hostile environment. Coming back to the company, he made a change and became a great leader.

After many failed attempts from CEO after CEO, Jobs was asked to return to Apple to bring up sales and make great profits in which he did. One key reason for Apple’s continued success is that Jobs created a company in his likeness and has installed in his top executives a deep understanding of his own business and technology philosophy that still guides Apple’s leadership today.

The first tenet of Job’s legacy is tied to creating a culture of innovation at Apple. Jobs had an uncanny sense of what a consumer might want in the way of technology and drove Apple’s innovation in this direction.  Jobs also helped his leadership team understand a key element of his thinking that was tied to Steve Jobs’ view that technology for technology’s sake is worthless unless it is also tied to elegant form, function, ease-of-use. The battleship grey IBM PCs were, in his mind, a failure in this area, and he strove to bring new design and thinking to the PC when he introduced the Mac. The other thing Jobs did, starting in the early 2000s, not long after he was diagnosed with cancer, was to start the serious process of grooming his successor.

By the mid-2000’s, it became clear to many that Tim Cook was being trained to eventually take Steve’s place, regardless of the outcome of his illness.

Given the success that Tim Cook has had leading Apple after Steve Jobs’s death, Jobs’ grooming a handpicked successor must count as one of the more important legacies of Steve Jobs, who left Apple in very good hands to carry on his legacy of the Apple Way.

Since Jobs’ death, Tim Cook has advanced Apple’s vision and added his own touch and style to the Apple way. But even with Cook’s stamp on Apple’s products, management, and direction, you can still see Jobs’ legacy played out in most of the ways the company is still managed and the direction Cook has led them in the last eight years. Apple is still a Steve Jobs driven company, led by many people who, in most part, he has tutored and mentored since he came back to Apple in 1997. Steve Jobs preparing his team for his eventual passing and instilling his thinking and vision in his team is a huge reason why Apple has succeeded even without him here to do it personally. It is no wonder that, eight years after Steve Job’s death, that Apple is a $1trillion company and has the potential of greater growth in the future. Steve Jobs may be gone, but his legacy lives on at Apple.

Antagonists and Critics

John Scully was very pertinent to the demotion of Steve Jobs, they both saw the success of Apple in a different way, but Scully felt that Jobs would bring more loss to the company if he went forward with his business idea at the time. Eventually, Scully met with the board who ousted Jobs from the very own company he started. Later, in years Scully realized that leadership on a level that Jobs was in was not fully in his comprehension to understand and regretted how it went down between the two.

The problem came to a head when by the beginning of 1985, the Macs that had not found purchasers during the Christmas sales of 1984 were piling up in storage. Apple had to publish the first quarterly loss in the company’s history and release a fifth of the staff. During a marathon meeting on April 10 and 11, 1985, Apple’s CEO John Sculley demanded to have Steve Jobs relieved of his position as an Apple vice president and general manager of the Macintosh department. According to Sculley’s wishes, Steve Jobs was to represent the company externally as a new Apple chairman without influencing the core business. As Jobs got wind of these plans to deprive him of his power, he tried to arrange a coup against Sculley on the Apple board. Sculley told the board: “I’m asking Steve to step down and you can back me on it and then I take responsibility for running the company, or we can do nothing, and you’re going to find yourselves a new CEO.” Most of the board backed the ex-Pepsi man and turned away from Steve Jobs.

Pertinent Legal or Relevant Administrative Barriers

In 2008 there was a case that involved plaintiff David Walsh who was an employee of Apple that filed a lawsuit against Apple for consistently and uniformly denying their network engineers the required regular, overtime, and other compensation that federal and state laws require. The class-action lawsuit network engineer David Walsh filed in U.S. District Court in California earlier this week against his former employer, Apple, for violating labor laws is a potentially high-profile and precedent-setting case, says a legal expert.

In the suit, Walsh, a former senior network engineer, alleges that Apple misclassified network engineers and network support staff as exempt from protections enacted by the federal Fair Labor Standards Act (FLSA) and state overtime laws when they should have been classified as nonexempt, and as such, should have been eligible for overtime pay. As a result of this alleged misclassification, the plaintiffs charge that Apple violated federal and state labor laws when it failed to provide Walsh and other network support staff with regular and overtime pay for routinely having to work more than eight hours a day, more than 40 hours a week and weekends. (In 2006, current and former IBM workers sued Big Blue for denying them overtime. IBM settled the case for $65 million in November that year.  In the next chapter, we will go into our retrospective analysis to include the 1^st scholarly/peer-reviewed article that was ever published, briefly discuss historical issues, trends, and forces, as well as historical contributors and their actual contribution.

Retrospective Analysis

The purpose of this retrospective analysis is to offer insight and explanation from the perspective of early contributors to this topic, theme, place, and time. The best historical perspective is often found in the first scholarly or peer-reviewed articles ever published with a similar or complementary research focus. Therefore, the first source ever published on this topic will be identified and discussed in this retrospective. Moreover, relevant historical concerns, trends, and forces that help explain the progress and evolution of this topic will be identified. Besides, historical contributors will be recognized to determine similarities or dissimilarities in their thinking and research findings.

1ST Scholarly or Peer-Reviewed Article Published

Blaskey, M. S. (2002). Succession planning with a business living will. Journal of Accountancy, 193(5), 22.

The influence of Blaskey (2002) cannot be ignored in that his work triggered individuals on the importance of engaging in active succession planning. He explains that every organization should work hard to preserve its existence by developing a plan that deals with the disability of any of the owners. He triggers people to question the importance of succession planning with a business living will. He explained that when a company that is privately held engages in succession planning, it prepares for the death or retirement of the owners. It is thus paramount for businesses to engage in the development of a plan that deals seriously with the disability of the owners. According to Blaskey (2002), organizations should consider the point at which disabled owners should stop participating in business decision making. However, the timing should very depend on the disability or ailing of the individual. All business owners should engage in active arrangements before the disability using insurance to acquire the interests of an individual or owner who is disabled permanently. Regarding property and businesses, agreements should be laid out, such as to redeem the equity interests of the owner following a disability. In addition, the company should review all partnership agreements in order to ensure that they handle the disability in the most effective way. The work done by Blaskey was influenced by Fayol (the father of succession planning) that management plays an essential aspect in various undertakings, including governmental, political, and religious. He divided his work into four main parts, all of which explained the importance of planning and elements of management. As a result, Blaskey (2002) published an article explaining that the process of succession planning in industrial undertakings must exercise the management of organizations (Carey & Ogden, 2000). An organization must operate without losing sight of crucial functions, which are often considered to be closely independent of the success of the company. Blaskey explained that although the productivity of disabled people could be diminished, they should be considered in succession planning. This is because different people often introduce unique qualities in an organization such as moral qualities – firmness, energy, loyalty, dignity, initiative and tact – general education, and special knowledge on technical, managerial, and commercial aspects that increase an establishment’s ability to accomplish its goals. Further on, the author explains that an organization that fails to implement succession can cause damage to these attributes since every individual is unique. However, an efficient plan will help ensure that the qualities of leaders are passed down to other employees to enhance their leadership capabilities.

Sonnenfeld, J. A. (2013). Steve Jobs’ Immortal Quest and the Heroic Persona. Journal of Business and Management, 19(1), 59-68.

In 2011, Sonnefeld from Yale University carried out an investigative study to understand the historical milestones in Apple following a press event at Cupertino headquarters where it was announced about the return of the founder Steve Jobs. However, Jobs failed to turn for the announcement of the product and stepped down from his position as the CEO in 2011 after returning from a medical leave. During his resignation, Jobs stated on August 22, 2011, that, “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day had come” After his resignation, Jobs did not take long before his death, which occurred approximately six weeks later. After his death, the company was filled with profound grief, although the enthusiasm of his products continued to soar. It was during this time that the company recorded the highest earnings of 53%, which were derived from the sale of approximately 37million iPhones that Jobs had launched before his death (Sonnenfeld, 2013).This sale caused Apple to become the largest vendor of a mobile handset, surpassing Nokia, which was previously known as a long-time leader. Before his death, people said, “Long Live The King,” a status that was restored shortly after his death. The public was amazed at how Tim Cooks managed to maintain the leadership team and become the company’s new Steve Jobs.

Since his death, researchers have confirmed that there is no close clone of Steve Jobs, considering he was a college drop-out who later became the product of most leadership simulations and management seminars. During the period of his leadership, Steve Jobs confided in trusted mentors, including David Packard, among others. After being forced out of the company in 1985, Jobs did not return to the company until 1997 when Apple purchased NeXT. However, one secret about Steve Jobs was that he understands the importance of succession planning as advised by Fayol (1918); Rothwell(2015) and Baslkey (2002). Upon his resignation, Tim Cook, the chief operating officer, took over the company’s reign. In his resignation letter, “as far as my successor goes, I strongly recommend that we execute our successor plan and name Tim Cook as CEO of Apple.” Following his instructions, the company’s board nominated Cook to the position of a CEO who was responsible for running the daily activities in the company during Job’s medical leave. In the short run, the company’s shares were down $17.61 to approximately $355.91. This aspect revealed that Job’s departure affected the company, which was totally expected. However, what was unknown to the public were the strategies that had been put ahead by Steve Jobs before his resignation. After Jobs took his medical leave, Cook took over the position and all activities where Jobs was involved actively, including in strategic decisions. During this period, Apple managed to deliver some of the best quarters ever in the company. When the company held a discussion about succession planning in 2009, Jobs stated that the most credible action was to name Cook as the new CEO. Although it was evident that no one could replace jobs, Cook had been tested and had proved that he was most qualified on the “try-before-you-buy” scenario.

Steve Jobs understood the importance of succession planning, as explained by Blaskey (2002), Fayol (1918), and Rothwell (2015) that effective leaders always develop an effective plan for organizations. He also acted in line with the analysis by Gilmore (2012) that the board should think about succession planning as an essential aspect of organizational continuity. An organization should partake in succession in terms of governance and strategy to foster continuity and success in the company. As an effective leader, Steve Jobs helped Apple to avoid disastrous events that could result due to failure to uphold organizational performance and profit margin. In the same manner, failure to undertake effective succession planning could have resulted in employee turnover, decreased productivity, and reduce profits, an aspect that could trickle down to the company’s reputation (Sonnenfeld, 2013).In this case, Apple could have lost its business to Nokia, its greatest source of competition at that moment. It was through Steve’s actions and understanding of succession planning that the company managed to retain its crucial functions, which are considered to be closely independent.

During his leadership at Apple, Steve Jobs developed different philosophies and leadership theories that he applied during his tenure as a leader. However, succession planning can only work well when there is a clear understanding of essential competencies and traits that are essential at every level of operation. Apple, which has served as an example for many institutions, understood the importance of succession planning and implemented it such that Tim Cook was placed in a position where he could be groomed by the CEO Steve Jobs (Sonnenfeld, 2013). This mechanism was employed to help the company’s continuity under Steve’s leadership model, which would be applicable even after Steve had left the company. While most companies often identify external recruits to assess candidates for succession, Apple has adopted a different mechanism where successful recruits are identified from within the company to avoid losing business to competitors. This aspect was also applied in Starbucks when Howard was required to return and take over the company’s operation from Donald, who was said to be incompetent. Later in 2017, Howard Schultz was seen in the annual meeting handing over the position of a CEO to Johnson, after which he became the executive chairman.

Pertinent Historical Issues, Trends, or Forces

Succession planning is a phenomenon that was first introduced by Henri (1918), who held the belief that interruption of a succession plan would destabilize an organization from an efficient transition. Henri published the book titled Administration Industrielle et Generalein 1916, where he explained 14 principles that had a direct impact on management (Fayol, 1918). In his book, Henri explained that the strength and stability of an organization are dependent on the ability and efficiency of its employees and an organization becomes more efficient when its workers to become skilled and well trained. The concept of succession planning was derived from Henry Fayol’s classic principles of management, and it is founded on the belief that it is the management’s responsibility to promote the stability and strength of personnel.

Research shows that effective leaders from history always developed effective plans for organizations. For instance, it is known that scriptural leaders such as Moses and Elijah prepared other leaders such as Daniel and Elijah, to succeed them (Blaskey, 2002). Spiritual leaders took the time to invest in the next generation of leaders who were found most fit to succeed them. From the beginning, God provided humans with specific instructions on how they would train and prepare different generation leaders (Duet. 6:6-9; 20-25). Many leaders fail to give considerable thought on the importance of succession until they realize that their work could be in vain without a trained and capable successor (Henderson, n.d.). Fayol’s understanding of succession planning was facilitated by the need to enable organizations to promote continuity while avoiding disastrous risks. Since its evolution, planning of succession has been considered a relevant human resource strategy that has been studied and researched in various professional consultations and within different professional periodicals. In his book, Henri (1918) explained that management plays an essential aspect in various undertakings, including governmental, political, and religious. He divided his work into four main parts, all of which explained the importance of planning and elements of management.  Henry explained the possibility and importance of teaching management and upholding the principles of management in organizations. He explains that succession planning in industrial undertakings must exercise the management of organizations (Carey & Ogden, 2000). According to the authors, an organization must operate without losing sight of crucial functions, which are often considered to be closely independent. Henry explained the importance of management in an organization and the significance of implementing the main functions of management to facilitate the anticipated productivity. He discussed various elements and principles of management, personal experiences, and observations, among others (Legris et al. 2014). It was along these paths that Steve Jobs learned the importance of succession planning and prepared Tim Cook to over from him in a bid to avoid the issues that result from a lack of effective succession planning.

According to Fayol (1918), every group in an organization exists due to the efficiency that results from the commercial, financial, technical, and managerial ability. The success of each of the components is founded on the combination of various qualities that may range from physical qualities such as vigor and health to mental abilities such as the ability to judge, adapt, learn, and understand. Fayol (1918) explains that people often introduce unique qualities in an organization such as moral qualities – firmness, energy, loyalty, dignity, initiative and tact – general education, and special knowledge on technical, managerial, and commercial aspects that increase an establishment’s ability to accomplish its goals.

After Henri, the most revered scholar in succession planning, was Rothwell, who explained that organizations that lack a formal succession plan often face issues that cause an organization to lose out on its opportunity to become productive (Rothwell, 1994). Key positions may fail to get filled, and essential vacancies may fail to take place as required, which results in fundamental positions being filled by individuals from outside the organization. Lack of desirable skills and inability to retain talent may cause an organization to fail to achieve the stipulated objectives. Rothwell (1994) explains that most issues that are evidenced in an organization often fail to undertake succession planning. In the same manner, human resource succession planning should be undertaken as a systematic effort to facilitate the continuation of a workforce that is considered critical to the achievement of an organization’s objectives. In his research, Rothwell explains that succession planning enables an organization to become prepared and promote continuity of operation in the event of death and vacancy when workers retire or get laid off. Succession planning should be undertaken to promote the evolution and continuation of pertinent skills that are essential for organizational success.

As a chairman of Domestic Estate Planning, Blaskey (2002) explained the importance of succession planning, especially about estates. He stated that individuals with disabilities should be considered in succession planning since every person has unique capabilities and qualities. In his article, Blaskey (2002) explained that different people often introduce unique qualities in an organization such as moral qualities, general education, and special knowledge on technical, managerial, and commercial aspects that increase an establishment’s ability to accomplish its goals.

The next in line was David (2005), who believed that succession planning is important in every organization in that it helps to promote a suitable workforce that is appropriate to replace in the event of absence or vacancy by developing successors with responsibilities with minimal insufficiencies and deficiencies. David also explains that succession planning serves as a holistic process that entails the development of personnel in their careers, an aspect that increases productivity in an organization. Fulmer and Conger (2004) joined Rothwell (2005) in the identification of essential components for success in an enterprises’ succession planning procedures. The author’s agreed that the main components of success include transparent process, skills and abilities, retention of a company’s secrets and knowledge, and promotion of accountability. Other components identified are evaluation and integration process, assessment of talents, and feedback on organizational productivity. Rothwell (2010) identified six distinct strategies that can be applied to identify the most crucial positions in an organization, including network charts, analysis of job vacancies, the use of organizational committee charts, experience, and holding discussions with senior leaders. Rothwell (2015) improved the previous editions and came up with effective planning processes that enabled the continuity of leadership while building an organization’s leadership from within.

This analysis from all the authors starting with Henri (1918) to Rothwell (2015) shows that succession planning is beneficial in that it enables an organization to take into consideration pertinent elements and components to implement a successful succession plan.

Historical Contributors

Henry Fayolis one of the most acknowledged and revered theorists and the earliest advocates of management and succession planning. Henri Fayol (1841 – 1925), a revered French pioneer in management, is ranked amongst the first individuals to identify and document the global need for succession planning. Fayol’s importance was most significant during a period when the modern world was at the mercy of the industrial revolution. His contribution was most espoused during a period of societal uncertainty, great change, economic growth, and innovation. He believed that ignoring the needs of succession planning caused an organization to fail to make effective plans (Swanson, 1994). He explained that managers often face significant challenges when it comes to identifying and challenging organizations and the people working in them. In a bid to manage effectively, leaders often identify the most operational way to accomplish better by referring to various guiding principles of present and past management theorists.

Rothwell William, a professor in the University Park Campus of the Pennsylvania State University, is a respected individual in issues that pertain to human resources. Rothwell (1995) was inspired by Henry Fayol, who is referred to as the father of management and succession planning. According to Rothwell (1994), planning of succession enables an institution to prepare for the departure, absence, or termination of individuals by ensuring the continuity of culture through the evolution of important skills in an organization. As the president of Rothwell & Associates, Inc. Rothwell has contributed to various issues about human resources, planning of succession, and management. He is revered for the extension profile in succession management and planning to enable organizations to achieve the aspired level of productivity (Soltani&Moghadam, 2016). His contribution to the business cannot be ignored in that he warns organizations that fail to take proactive steps to plan about the future. Rothwell advises that organizations should undertake proactive steps to plan the organization’s talent needs to reduce the chances of disaster and disruptions when employees who retire or get lured from the company by competitors. Through his efforts, the business landscape has become more complicated in that organizations have started feeling the impact of the aging workforce and the retiring workforce who take their experience and the wisdom accumulated over the years with them (Berke, 2005). Rothwell’s effort to make succession planning a common aspect in management is being appreciated in that the loss of institutional memory has become apparent such that no organizations can afford to function without a certain succession plan.

Fayol’s work is often considered the pioneer and father of succession planning. Although most scholars have refuted his work as a result of age, it is evident that Fayol’s work was based on observation during the industrial period, and the aspects highlighted are not different from what contemporary scholars have observed. Scholars believe that the elements of Fayol’s management are reinforced by contemporary findings rather than refuted (Rothwell, 2015). In the next chapter, the researcher will analyze a modern or most current peer-reviewed article and compare current trends or issues with regards to succession planning. The paper will also identify contrasting issues to those identified in the past about succession planning.

What was the Most Current Peer-Reviewed Article?

Rothwell, W. J. (2011). Replacement planning: A starting point for succession planning and talent management. International Journal of Training and Development, 15(1), 87-99.

Rothwell (11) peer-reviewed article titled, ” Replacement planning: A starting point for succession planning and talent management,” is considered one of the most authoritative and comprehensive articles on the subject of successional planning. The article has been explained, such as to reflect on the latest and most effective succession practices through the presentation of strategies that create a complete systematic planning program. This piece of work has identified and clarified various values that relate to the planning and management of an efficient succession program by helping organizations to plan and fill crucial vacancies at top management levels to technical, administration and, production, and sales positions (Henri, 1918). Rothwell has identified the most effective ways that an organization can develop and retain top talent by building and preserving the intellectual capital in the company (Fells, 2000). However, this activity cannot be successful without assessing current needs and various future resources that can facilitate seamless and effective succession planning. Unlike the old findings by Fayol’s, Rothwell advises that an organization should implement online among other technological tools that help to implement and organize various management programs and succession plans.

Being the latest edition peer-reviewed article, Rothwell has included new material that reflects on the author’s surveys on the transformation of whole systems, support packages for software, and the management of efficient succession crises (David, 2005). The advanced edition of succession planning has also featured advanced diagnostic tools that assess various succession needs and provides training guides in terms of what the organization should have to develop, sustain, and evaluate an effective succession planning procedure.

Rothwell (2011) has analyzed current issues that are evident in companies that make it necessary to implement succession planning. However, others find it difficult to implement succession programs owing to the increasing rates of unemployment in the country. Rothwell explains that many leaders have been concerned about the success of succession planning following the recession of 2007 in that leaders wonder whether it is important to invest money in the management of talents and planning of succession in an unstable economy that is causing an increased level of unemployment. The aftereffects of the 9/11 event caused the collapse of the world trade center, where approximately 172 corporate leaders lost their lives. This event strengthened the message that the world had gotten form the tragic deaths in Oklahoma City that life is unpredictable, and that talent is increasingly at risk, especially in areas where disaster can strike unexpectedly. Rothwell (2015) explains that these scenarios have causes organizations to begin examining their bench strength in areas that are prone to attacks by terrorists who can wipe an entire city rendering an organization difficult to begin again.

Rothwell (2011) advises organizations that they should consider succession planning and avoid thinking that the practice is limited to individuals at the top level of the organization charts. The need to remain competitive has created the necessity for managers to implement workforce planning that cuts across from the low levels to the top level of employees in the organization chart. The need to create a stable bench strength has been facilitated by the fact that hiring from outside affects continuity and organizational productivity. Rothwell (2011) advises that people should focus on getting work done rather than replacing people by increasing their awareness of succession planning. Organizations should understand that succession planning cuts across all management levels, and it is applicable to professional workers such as engineers, MIS professionals, research scientists, and lawyers, as well as technical workers who have specialized knowledge (Fayol, 1918). This is an essential aspect to consider that most individuals tend to leave with critical and proprietary institutional knowledge and memory whenever they leave. It is thus necessary for organizations to increase their awareness and need for technical succession planning that focuses on horizontal levels of the management chart and should entail the deepening and broadening of professional knowledge to preserve it for organizational use in the future.

Rothwell (2011) provided in-depth insights on how best organizations can undertake successful succession programs while minimizing the succession issues. He explains that planning and talent management are some of the most effective approaches and practices in succession management and planning in that they promote leadership continuity. The author has analyzed drivers of change in the industry and some of the trends that are influencing succession management and planning. Rothwell (2011) has explained the importance of adopting new approaches in succession planning, such as a fifth-generation approach. Organizations can implement a successful plan through competency identification and implementing competency creation strategies to build on the bench strength. Value clarification studies are encouraged to identify the current problem and determine the most effective organizational practices and requirements for identifying and implementing a systematic succession plan (Rothwell, 2015). Lastly, Rothwell advises that organizations should identify key positions and create pool talents by adopting effective techniques and assess future work requirements to close the development gap.

What were the Current Issues, Trends, or Forces?

The contemporary industry has issues, trends, and forces that affect the efficiency of succession planning. Unlike in the past, when it was easy for leaders to identify the person fit for succession, it has become difficult for organizations to identify the most efficient person to promote and engage in succession practices. Rothwell (2011) explains that an individual might stand out at their position and still lack the talents and skills that are required to get higher in the ladder. Although organizations are likely to face the pressure to reward hard work or loyalty with promotion, this aspect can be solved through efficient identification of potential candidates and arranging the most appropriate development and learning courses for potential candidates to set them apart from the rest.

In the current world, the phenomenon of finding comfort in familiarity has been appreciated in the professional world such that it has become difficult to resist bias at the workplace. For instance, men are likely to lean towards men, and the need to recruit individuals who fit stereotype tends to override skill-based and logical thought processes (Rothwell, 2015). Organizations are thus advised to identify characteristics that are most effective for a successor to ensure that only candidates with the most suitable characteristics are hired. As Henri (1918). explains, most organizations have been struggling with the need to promote company morale amidst undesirable side effects of succession. Most people in organizations are worried about redundancy or retirement, an aspect that can impede discussions and threaten the importance of succession preparation. It is thus necessary for organizations to adopt simple and open discussions on the individuals who are most fit for succession. Husting & Alderman (2001) advises that organizations should adopt a smart succession plan model to save the company resources in the long run. People’s career goals should be balanced with the aspects that are fit for business by keeping the desired individuals in the loop and promoting fairness and objectiveness in the planning process. The process should also be simple in order to promote the desired succession that reduces the likelihood of an undesirable impact on the company’s bottom line. Ambiguity, bias, limited updates, and hypothetical valuation are some of the other relevant issues evidenced in succession planning programs.

What Were the Contrasting Issues, Trends, or Forces to Those of the Past?

Succession planning was initially used to facilitate smooth transitions to the top levels. The practice has now evolved such that organizations undertake the practice to ensure continuity of business by keeping essential positions with motivated strategists, motivated workforce, and requisite competent. Before exiting his office, Britain’s prime minister, Margaret Thatcher, worked hard to ensure that she left a reliable individual in the office, John Major. She explained that John Major was the most capable individual who would secure and safeguard her legacy while taking the politics forward as expected (Blackaby&Blackaby, 2001). One of the essential aspects of leadership is to prepare a succession plan. Cardinals in Rome often select the next Pope in line while the United Kingdom often wonder whether the selected person is fit for the job. Since its invention, organizations have started to appreciate that continued and successful survival of an organization depends largely on having the most effective people in place at the right time. Organizations in modern society have realized the devastating effect that an institution would have if a successor were required, and none was determined to be fit.

This aspect was well understood in Starbucks when Howard stepped back to serve as the company’s CEO to help improve the company’s position in the coffee industry. Since Schultz returned to run the company in 2003, the shares increased significantly. Later in 2017, Howard Schultz was seen handing over his keys to Kevin Johnson, the president and COO of Starbucks, during an annual meeting. Howard announced in the annual meeting explained that Kevin Johnson would become the CEO while Schultz continued would be the executive chairman. In 2017, the Starbucks board was careful to avoid repeating the mistake that had been done back in 2005 after Jim Donald became the CEO. Donald had not worked in the company and instead had come from a supermarket business, an aspect that caused him to fail in understanding the company’s culture (Legris et al. 2014).The company was wrong in its failure to groom a competent candidate from the inside who understood the company’s culture effectively. In 2007, Schultz was required to return to the company following continued complaints and losses recorded in the company that caused Donald to get fired. In 2017, as Schultz thought about stepping down, he thought about it differently. Johnson, who took over from Schultz, had been invited into the company six years earlier from Juniper Networks Inc., which was an internet infrastructure company. Through this period, Schultz realized that Johnson had the innate ability to be human, and he had managed to align culturally with the company. Although the new CEO Johnson is facing various issues in the company, the tech nous and company’s mission has given him a good start.

Rothwell (2011) explains that most organizations have moved from the slow and annual aspect of succession planning to fast and real-time scenarios. Due to the growing economy, organizations have found the need to quicken the success process while having real-time insight on the need for quality leadership, among other critical capabilities. The speed of operation has increased since most succession issues are in the present rather than in the future. The succession planning process has changed from a fragmented plan as was done in the past to a more integral insight. As explained by Fayol (1918), former succession reports often looked good on the surface but were less efficient when locked from a deeper perspective. The succession planning process has moved from a rigid process to a more flexible process. The planning is adaptable and flexible to increase the chances of success. For instance, when an individual is acquiring a new enterprise, their succession plan must assess the leadership strength to foresee succession issues. This helps to avoid the aspect of catching up that is common with traditional processes of succession.

Modern organizations have identified the need to move from a focus on positions to talent pools. In the past, most management processes were focused more on identifying potential successors for positions. The trend has now changed such that organizations are more focused on the strength and composition of pools with individuals with strategic positions and capabilities. For instance, organizations now identify pools for marketing and sales, leadership, and product management rather than the traditional method of identifying potential successors for every position. According to Rothwell (2011), a strong pool enables an organization to identify a pool of individuals with the right profile whenever they are needed.

In the past, succession planning was a secret process that had total insight into the executive board only. Modern organizations have now introduced openness and transparency to reduce the chances of resistance and lack of motivation. Openness has also facilitated increased employee participation, which is likely to promote organizational interests rather than personal needs. This aspect has also opened the boundaries, such as to include external candidates rather than restricting the process to internal candidates only. For instance, Steve Jobs stepped out of Apple in 1985 without any form of succession planning. After his resignation, the position of the CEO was taken over by John Sculleywithout any prior preparations, after Jobs lost a battle in the boardroom(Sonnenfeld, 2013). In this case, the succession planning was done secretly without, an aspect that was only known by the top management. In the same manner, Starbucks made the same mistake in 2005 when Donald, who replaced Schultz from Starbucks, was chosen from another company(Legris et al. 2014). Rather than being groomed by Schultz, Donald took over leadership from outside the company, an aspect that caused him to fail to get along with the company’s culture.

The modern succession plan has taken into consideration the fact that good candidates play a crucial role in the process, although they may not be on the company payroll. While traditional processes focused on individuals, modern succession plans consider teams, networks, and individuals in the succession plans while considering internal and external possibilities. As Rothwell (2011) explains, the procedure has now moved from a subjective succession plan to an objective that is driven by software and technology. In 2017, the Starbucks board was careful to avoid repeating the mistake that had been done back in 2005 after Jim Donald became the CEO. Donald had not worked in the company and instead had come from a supermarket business, an aspect that caused him to fail in understanding the company’s culture. The company was wrong in its failure to groom a competent candidate from the inside who understood the company’s culture effectively. In 2007, Schultz was required to return to the company following continued complaints and losses recorded in the company that caused Donald to get fired. In 2017, as Schultz thought about stepping down, he thought about it differently(Legris et al. 2014). Johnson, who took over from Schultz, had been invited into the company six years earlier from Juniper Networks Inc., which was an internet infrastructure company. Through this period, Schultz realized that Johnson had the innate ability to be human, and he had managed to align culturally. In the same manner, Apple understood the importance of grooming employees for succession planning. Before leaving the company, Jobs prepared Tim Cook and worked closely with him to ensure that he understood all aspects of operation in Apple to promote continuity even after he had left.

Data-driven objective criteria have been chosen on the basis that a good track record and a high score on the leadership models are the main predictors of success. While many people tend to disagree with this undertaking, David (2005) explains that using objective data enables an individual to become less biased and dependent on subjective opinions. It has also moved from normal suspects that are likely to be noticed by the senior management to surprising appointments whose credibility is objective and verified by available data.The main aim of the modern succession plan is to improve the traditional mechanisms rather than to replace them. The help of modern analytical tools has made it possible for individuals to redesign the traditional management procedure for a more effective and impactful procedure.

References

Berke, D. (2005). Succession planning and management: A guide to organizational systems and practices. Retrieved from Business Source Complete Database.

Beth, Z. (2018). “Workforce planning: one of the most challenging HR compliance issues for 2018”. Strategic HR Review, Vol.17 Issue:2, m.k. 105-107 doi:10.1108/SHR-01-2018-0001

Blackaby, H., &Blackaby, R. (2001). Spiritual leadership. TN: Broadman and Holman.

Blaskey, M. S. (2002). Succession planning with a business living will. Journal of Accountancy, 193(5), 22-23

Bloomington, Authorhouse. Krauss, J. A. (2007). Succession planning and talent management recommendations to reduce workforce attrition and prepare for an aging population. Tesis Ph.D. yang tidakditerbitkan. Wilmington University, Delaware, United States.

Carey, D. C. & Ogden, D. (2000). CEO succession. New York: Oxford University. Cosack, Sabine, Guthridge, Matthew, Lawson & Emily (August 2010). Retaining key employees in times of change. McKinsey Quarterly, 3(1), 135-139.

David, C. (2005). Succession planning: A developmental approach: Developmental and learning in an organization. An International Journal, Vol. 19 Issues:5, pp. 11-13, doi.org/10.1108/14777280510616230

Fairfield-Sonn, J. W. (2001). Corporate culture and quality organization. Westport, CT:

Fayol, H., (14). Principles of management. General and Industrial Management.

Fayol, H. (1918). General and industrial management. Mansfield Centre, CT, Martino Publishing, New York

Fells, M. J. (2000). Fayol stands the test of time. Journal of Management History. https://doi.org/10.1108/13552520010359379

Fulmer, R. M., & Conger, J. A. (2004). Developing leaders with 2020 Vision. Financial Executive, 20(5), 38-41.

Gay, M., & Sims, D. (2006). Building tomorrow’s talent: A practitioner’s guide to talent management and succession planning.

Hassan Soltani&NasibollahValavi Moghadam. (2016). Explanation of the impacts of succession planning on organizational effectiveness in Refah Bank branches of Kohgiluyeh and Boyer Ahmad province.

Henderson, J. (n.d.). The value of succession planning. Leadership Advance Online. School of global leadership & entrepreneurship. Regent University.

Henri, F. (1918). General and industrial management. Mansfield Centre, CT, Martino Publishing, New York.

Husting, P. M., & Alderman, M. (2001). Replacement ready. Nursing Management, 32(9), 45- 50

Rothwell, W. J. (2005). Effective succession planning: Ensure leadership continuity and building talent from within. New York: Amacom.

Rothwell, W. J. (2010). Effective succession planning: Ensuring leadership continuity and building talent from within. New York: Amacom.

Rothwell, W. J. (2011). Replacement planning: A starting point for succession planning and talent management. International Journal of Training and Development 15:1 ISSN 1360-3736. Rothwell, W. J. (1994). Effective Succession Planning. New York: AMACOM.

Rothwell, W. J. (2015). Effective succession planning: ensuring leadership continuity and building talent from within. New York: Amacom.

Swanson, R. (1994). Analysis for improving performance: Tools for diagnosing organizations & documenting workplace expertise. San Francisco: Berrett-Koehler.Preimesberger, C. (1997). Steve Jobs Returns in 1997 to Revive a Moribund Apple. eWEEK at 30.