Harnessing Business Psychology for Effective Succession Planning
Phil Wheeliker PGDMS MBA PGDipPsych MA
NED, Board Chair. Management Psychologist, Coach and Trainer. Mental Health Practitioner, Coach and Trainer.
Phil Wheeliker DipHRM, Diploma in Strategic HR, Diploma in Organisational Design and Management.
Succession planning is a critical component of sustainable organizational growth, yet many businesses struggle to execute it effectively. By integrating business psychology disciplines and methodologies, companies can streamline this process, ensuring they have the right people in the right roles to secure future success. This blog explores how psychological tools and techniques can be applied to succession planning, with practical examples and recommended psychometrics for each stage.
What Is Business Psychology?
Business psychology, or industrial-organizational psychology, is the application of psychological principles and methodologies to solve workplace challenges. It focuses on optimizing human potential, improving workplace culture, and aligning individual goals with organizational objectives. In succession planning, business psychology ensures candidates’ potential aligns with long-term strategic needs.
Stages of Succession Planning and Relevant Psychological Methodologies
1. Identifying Critical Roles and Competencies
Before assessing potential successors, it is essential to identify key roles, and the competencies required for success in those roles. This involves job analysis, competency mapping, and organizational needs assessments.
Key Methodology:
Example Scenario: An organization preparing for the retirement of its CFO conducts a job analysis to identify core competencies such as financial acumen, strategic decision-making, and leadership.
Outcome: Clear understanding of the role’s requirements facilitates targeted succession planning.
2. Talent Identification and Development
Identifying high-potential employees (HiPos) is central to succession planning. This stage focuses on assessing current employees’ potential, performance, and readiness to step into leadership roles.
Key Methodologies:
Recommended Psychometric Tools:
Example Scenario: A tech company uses the Hogan Leadership Forecast Series to assess mid-level managers’ potential for executive roles. One candidate scores highly in strategic thinking but requires development in team-building skills.
Outcome: Insights guide personalized development plans, preparing candidates for leadership roles.
3. Creating Development Plans
Development plans bridge the gap between current competencies and future role requirements. These plans often combine training, mentoring, and stretch assignments.
Key Methodologies:
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Example Scenario: A high-potential candidate identified for a COO role is enrolled in a leadership development program. The program includes coaching sessions and a six-month stretch assignment managing a cross-functional project.
Outcome: Targeted development accelerates readiness for the COO role.
4. Evaluating Readiness and Fit
Ensuring a candidate’s readiness for a critical role requires thorough evaluation. This stage combines psychometric testing with real-world simulations.
Key Methodologies:
Recommended Tools:
Example Scenario: A retail company’s succession plan includes using an assessment centre to evaluate two candidates for a regional manager position. Both candidates participate in a simulation where they manage a team during a high-pressure sales event.
Outcome: The candidate who demonstrates superior decision-making and leadership under pressure is chosen, ensuring role readiness.
5. Monitoring and Evolving the Plan
Succession planning is an ongoing process. Regular reviews ensure alignment with changing organizational goals.
Key Methodologies:
Example Scenario: An organization’s annual review reveals new strategic goals emphasizing innovation. The succession plan is updated to prioritize candidates with a track record of creativity.
Outcome: The plan remains dynamic and relevant to evolving business needs.
Benefits of Using Business Psychology in Succession Planning
Conclusion
Harnessing business psychology disciplines and methodologies ensures a robust and effective succession planning process.
By leveraging tools like psychometric assessments, 360-degree feedback, and development centres, organizations can identify and develop future leaders who align with strategic goals. Investing in these methodologies not only secures organizational continuity but also fosters a culture of growth and resilience.