The largest companies in Kenya in terms of revenue are Safaricom, Equity Bank and KCB, in that order. Recently, they recorded a revenue of approximately US$ 2.4, 1.2 and 1.1 billion respectively.
However, in terms of management, a survey reveals both confidence in the current leadership and concerns with the future captaincy in equal measure.
When Michael Joseph left Safaricom, Bob Collymore took over but continued reporting to his predecessor for over nine months.
Bob’s unfortunate demise saw the recall of Michael Joseph, until such a time that Peter Ndegwa took over as the first Kenyan-born CEO to lead the Telkom giant.
Peter’s leadership success is yet to be seen given that in the past two years more than half of Safaricom’s executives have quit, allowing him to build his own team.
In Equity Bank, many are wondering what will happen when its founding CEO, James Mwangi, eventually calls it a day, while CEO succession in KCB looks more like guesswork.
While it is true that many large businesses and enterprises do plan for the foreseeable future by having contingencies to help avoid interruptions and ensure the smooth operation of their businesses some still struggle with succession plans, often ending up rushing or undermining them.
Hence, the question is: why has succession management remained a thorn in the flesh of most corporates?
Businesses usually develop plans to pre-identify employees with the potential and capabilities to fill specific roles or vacancies in the future.
They highlight the skills needed for each role, establish precise career trajectories and identify top talents within the organization.
In doing this it is advantageous to develop the employees’ critical skills. This is called succession management.
It enhances faster time-to-productivity and hiring besides improving employee retention and ensuring effective and efficient succession.
Succession plans fail for a number of reasons. However, the 5 top reasons for failure include developing a succession plan for the sole purpose of finding a successor, a reactive rather than proactive approach, exclusivity rather than inclusivity, lack of talent pool, and taking the plan as an independent rather than integral process.
It is important to find not only a successor but the right successor. Sad but true, some companies do look for successors for the sole purpose of filling the position unexpectedly left by another employee.
Preparing a pool of possible candidates/successors not only allows the company to maintain its business culture, build positive public opinion, improve the employer’s image and make changes according to its planning but also prepares it for abrupt changes out of its control.
Secondly, oblivious to the need for building every employee for smooth business operations, many companies usually give special training to at most 25% of their workforce.
This not only limits the scope of talent pools but may also alienate aspiring employees who may have the potential to lead the company to greater heights, if only they had the right career pathing.
Moreover, some of those qualified may not be aspiring for the role, which, if given, may not produce the optimum outcomes.
Thirdly, many companies fail to realize the importance of creating a talent pool by training their employees based on qualifications, skills, preferences and proficiency and that these should align with the company’s strategic goals and be formally approved by the leadership team.
Sometimes companies develop excellent succession plans but have no one to enact them.
A right mix of employees and identification of the right successor is therefore an imperative, yet difficult task.
To inspire confidence, it requires a thorough selection through the usage of KPIs, 360-degree reviews, psychometric tests, 9-box grids, and objective & key results.
Fourthly, to develop a reactionary succession plan such as when an employee is nearing retirement or has given a notice of resignation is to invite failure.
This is because such processes are done in a rush and several aspects are overlooked. Successful succession plans require long-term planning, career pathing, and testing so as to identify successors who want the role and are qualified for it.
It is crucial to proactively develop succession plans early enough so that they are ready to be deployed whenever the need arises.
This should also include regular review of job descriptions and required skills as well as of shortlisted internal candidates.
Lastly, many companies treat succession plans as a separate and independent process. Notwithstanding the fact that initial planning, tests and developments should be the responsibility of each respective department with HR coming at the final stage, oftentimes all these are considered HR functions.
Additionally, whereas succession plans are tied to training and development opportunities, some companies don’t see the need to give the successor further training and development opportunities.
These attitudes may lead to negative results even when the succession plans are properly developed.
Therefore, developing a correct and active succession plan early enough by every large business cannot be overstated.
It calls for learning from past mistakes, if any, and from other companies' mistakes, and reevaluating succession plans if they already exist. Have you developed yours?
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