Gen Y Succession Planning for a New Generation of Leaders
By: Marc Effron and Miriam Ort
With Generation Y employees (otherwise known as Gen Y) comprising an increasing percentage of the workforce, organizations are being challenged to rethink and realign their talent practices to meet the demands of this new generation. Fortunately, the science that underpins most core talent processes is based on fundamental human behavior and is likely to stand the test of time. At the same time, companies should reexamine their practices to ensure they are applying them in a way that is effective for Generation Y.
No talent practice represents this phenomenon better than succession planning, a process that’s success is contingent on the career goals, planning, and cooperation of the employee. Research shows that Gen Y is demanding what we should have given to prior generations — an easy to understand, highly transparent process with plenty of feedback and development from their manager. It’s a reasonable request and far easier to deliver than it might appear.
The principles that Gen Y employees are requesting — simplicity, accountability and transparency — are the key to all successful talent practices. In our new book, One Page Talent Management: Eliminating Complexity, Adding Value (Harvard Business Publishing) we describe how to use these principles to create a succession plan that is incredibly effective for Gen Ys (and everyone else).
Keep your Succession Plan Simple
Our tendency in HR is to design complex, elegant processes that can backfire during implementation. When designing a succession planning process, your mantra must be “implementation is everything.” Momentarily put aside all of your hard-earned HR knowledge and ask yourself, “How can we make this so simple and easy to use that successful implementation is guaranteed?”
Here are a few suggestions for building a lean, highly effective succession planning process:
- Use only the performance and potential (PxP) grid: A standard tool at many companies, this simple 9-box grid records performance on one axis, and potential for upward growth on the other. It can quickly pinpoint those with succession potential. To use the PxP correctly:
- Assess potential to advance (not values, ambition, etc.): Succession planning’s most important role is to help determine who moves up in the organization. Have a direct discussion about a leader’s ability to move up, not about their values, ambition or other proxies for upward potential. Those factors are just components of their ability to move.
- Define potential using actual positions: Discuss whether Mary can or can’t be the CFO in three years, not whether she has the potential to move “two levels.”
- Calibrate to determine ratings: We all unconsciously apply our individual biases when we rate others. Mary’s final potential rating should be decided by her manager, together with his departmental or regional peers.
- Review talent for succession twice a year: If your process is simple, twice-a-year reviews shouldn’t be an administrative burden. It will also ensure that your plans are current and realistic; Gen Y’s will want frequent updates on where they stand.
- Don’t use “high potential” assessment tools: Simply put — there is no evidence they work. There’s no science to support claims that a single test can assess potential to succeed in a wide variety of scenarios.
Drive Transparency in Career Planning
We believe transparency is a critical element in successfully growing talent. Gen Y expects transparency about both the succession planning process and their own status.
Unfortunately many organizations harbor deep-seated concerns about lifting the curtain around this process. Our perspective is that organizations should start with 100% transparency and alter that plan only where a legitimate case can be made for confidentiality. Here’s how to be transparent with your career planning process:
- Tell high potentials that they’re high potentials: Faulty logic often drives companies’ decisions to withhold information about employees’ potential. They fear that disappointed employees who are not high potential will run for the door or that high potential employees will begin feeling overly entitled. What organizations fail to realize is that Gen Y's expectation of open communication means high potential employees need to be told about their status, or they will likely explore other opportunities. Will some people be upset that they’re not high potential? Sure. Will they immediately run for the door? Not necessarily, particularly if you’ve let them know why and communicated what they need to do be successful in their career.
- Tell everyone else their succession status too: We consider it the “right thing to do” to ensure that everyone knows the likely direction of their career. Gen Y will assume you’re going to share this and will become increasingly disengaged if you don’t.
- Make all forms and instructions available to everyone: Employees might ask some tough questions when they first see your succession planning process and tools. The alternative is to not tell them and let them assume you’re hiding something that they should know.
Increase Accountability with Performance Reviews
Accountability is where most organizations lose their succession planning nerve. Without clear accountability, even the most well-intentioned manager may not spend the time necessary to identify and grow their team’s succession candidates. Managers must be held accountable to:
- Tell employees the results of succession planning conversations: We mention above that transparency on this topic is essential. Holding leaders accountable for that conversation is the only way to ensure it happens.
- Follow up on development actions: Planning who will step into which role is a great start, but growing the talent to make that happen is what truly matters. After each succession planning conversation, managers should have a list of “gaps” that must be closed to ensure succession can take place. They should be held accountable in their own performance review for progress against closing those gaps.
What Gen Y seeks is highly reasonable and altogether achievable. They aren’t asking you to change how you run your business. They simply ask that we make processes like succession planning easy to understand, fully transparent and that management “walk the talk.” Gen Y has raised the bar — but at organizations that deliver, everyone wins.
Marc Effron is President of the Talent Strategy Group. Miriam Ort is Senior Manager, Human Resources for PepsiCo. They are the authors of One Page Talent Management: Eliminating Complexity, Adding Value.