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Succession Planning
Succession planning is “the process of ensuring a suitable supply of
successors for current and future senior jobs arising from business
strategy so that the careers of individuals can be planned and
managed to optimise the organisations’ needs and individuals’
aspirations”.
The growth and development of an organisation requires a
succession of people to fill various important positions in the
organisations. The objective of succession planning is to identify,
develop and make available people ready to occupy higher positions
in the organisation. The vacancies may arise due to retirement,
resignation, death, creation of new posts and new assignments.
Succession planning can be defined as a process of selecting and
grooming employees for higher positions within the organization. It
enhances the organizational capability by providing experienced and
competent individuals for senior level roles that are critical for the
company.
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Succession can be ensured from within or from outside the

organisation. Succession from within ensures the satisfaction of
employees as they see the opportunities for growth. Organisations,
therefore, should see the potential available inside, and make efforts
to groom them for occupying higher positions and for taking more
responsibilities. A steady flow of internal talent, to fill up higher
posts, creates healthy environment and better human relations.
Learn about:- 1. What is Succession Planning? 2. Need for Succession
Planning 3. Main Objectives 4. Activities 5. Steps Involved in the
Process 6. Difference between Succession Planning and Career
Planning 7. Advantages 8. Challenges 9. Practical Ideas on How you
can get more Impact from your Organisation’s Succession Planning
Efforts.

Succession Planning in HRM: Meaning,

Need, Objectives, Process Steps,
Advantages, Challenges and Other Details
Succession Planning – What is Succession Planning?
Succession planning is “the process of ensuring a suitable supply of
successors for current and future senior jobs arising from business
strategy so that the careers of individuals can be planned and managed
to optimise the organisations’ needs and individuals’ aspirations”.
Succession planning can be defined as a process of selecting and
grooming employees for higher positions within the organization. It
enhances the organizational capability by providing experienced and
competent individuals for senior level roles that are critical for the
company.
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Succession planning is often represented through a sub-set called

replacement planning. Replacement planning is focused narrowly on
identifying specific back-up candidates for given senior management
positions. The final outcome of the effort is replacement charts.
Successors may come from internal employees or from external
people. Internal employees are advantageous to the organisation. The
internal employees are already familiar with the company policies and
procedures and the organisational culture. Normally, organisations
would like to consider internal employees to occupy senior positions.
It is relatively easy to identify potential employees who have the
knowledge and skills to occupy higher positions in the organisation.
Further, the organisation can provide necessary training to upgrade
the skills of potential employees, if required. The scope of succession
plan would be more in a growing organisation. Complete dependence
on internal candidates for succession is not desirable; and it is
necessary to allow inflow of new blood in the organisation.
While career planning covers executives at all levels, succession
planning is needed for key positions at higher levels of the
organisation. Career plan also includes succession planning.
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Continuity of an organisation requires a succession of persons to fill

up key positions. The basic purpose of succession planning is to fill up
the vacancies, whenever they arise, in key positions. Vacancies take
place due to superannuation, resignation, promotion, growth,
diversification, creation of new positions, etc.
This is the process of ensuring proper supply of successors, for the
present and the future, for important senior or key jobs arising due to
various reasons, so that the organisational process is not affected and
career path of individuals can be managed. This helps in fulfilling
organisational needs as well as satisfying the individual’s aspirations.
Succession can be ensured from within or from outside the
organisation. Succession from within ensures the satisfaction of
employees as they see the opportunities for growth. Organisations,
therefore, should see the potential available inside, and make efforts to
groom them for occupying higher positions and for taking more
responsibilities. A steady flow of internal talent, to fill up higher posts,
creates healthy environment and better human relations.
Also, organisations may find, if necessary, talents from outside where
internal potential is not suitable/available or, at the time of massive
growth and diversification when internal supply is not sufficient.
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Complete dependence on the internal source may cause stagnation.

Organisations without new brains/new talents may not get new ideas,
innovations and aggressiveness. Also, complete dependence on the
external source may cause (may cause what?).
Within any organisation, people in leadership positions eventually
ceases to fulfill that role.
This can occur for a variety of reasons, such as:
i. Promotion within the organisation
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ii. Move to part-time arrangement for better work life balance

iii. Involuntary departure from the organisation
iv. Retirement
v. Serious illness
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vi. Death.
vii. Voluntary departure from the organisation to pursue a career
elsewhere.
Organisations that fail to plan for the timely and effective filling of
such leadership roles can be caught off guard, with the consequent
disruption to normal business activities and the loss of market share.
Succession planning is the pre-emptive process of identifying
significant leadership positions that could put the organisation at risk
if left unfulfilled, targeting current employees that could move into
such roles and grooming them for succession. Managing leadership
succession effectively requires a structured approach that is agreed,
understood and followed by everyone involved in the planning
process.

Succession Planning – Need

Organisations exist as on-going concerns while personnel come in and
go out on regular basis. Therefore, the continued existence of an
organization over time requires & succession of personnel to key
positions. These key position holders decide the prospect of the
organization. Succession planning ensures that only right personnel
fill the key organizational positions.
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Succession planning ensures this in the following manner:

1. Through succession planning, an organization is able to identify the
persons who are likely to fill up key positions in future.
2. Succession planning helps an organization to groom the successors
for key posts so that there is high level of match between the role
requirements and personnel abilities.
3. When succession planning is undertaken effectively and overall
suitability of personnel is worked out an objective criteria,
organizational personnel develop a feeling that the merit has a worth
in the organization.
Succession planning is needed for the following:
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(i) Continuity – It is not a year-end process, but a continuous one.

Potential replacement can be planned regularly for the continuity of
the organisation.
(ii) Long-term Perspective – A ready pool of talent should be available
for immediate replacement. This is to ensure continuity.
(iii) Organisational Need Perspective – Organisations should hire
talents from outside whenever needed, but this should be accepted by
internal employees, to avoid confusion and frustration.
(iv) Turnover Management – A normal turnover rate ensures a free
flow of work power in the organisation. Appropriate plans help in
avoiding positions being blocked.

Succession Planning – 6 Main Objectives

The growth and development of an organisation requires a succession
of people to fill various important positions in the organisations. The
objective of succession planning is to identify, develop and make
available people ready to occupy higher positions in the organisation.
The vacancies may arise due to retirement, resignation, death,
creation of new posts and new assignments.
Business organizations that are well-known for their succession
planning and executive talent development practices include – GE,
Honeywell, IBM, Marriott, Microsoft, Pepsi and Procter & Gamble. It
is only perfectly logical to agree that well-laid down objectives become
a pre-requisite to successful succession planning.
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The various objectives of succession planning are:
i. To create organizational data that can be used for staffing decisions.
ii. To identify employees with high potential so that they can be
trained to undertake higher responsibility
iii. To provide assignments and opportunities for high potential
employees so that they get the necessary exposure to groom
themselves
iv. To involve senior leaders of the organization in grooming these
identified employees
v. To improve employee loyalty and engagement
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vi. To cater to the career development expectations of the workforce

and thereby enhance their commitment to the organization.

Succession Planning – 4 Important Activities

Some of the important activities of succession planning are
described as under:
1. Top management support – HR manager along with heads of the
departments should discuss the plan and obtain support from top
management for initiating succession planning activities.
2. Identifying potential successors for critical positions based on
consistent performance over a period of time. This information can be
collected from performance appraisal forms, feedback from senior
managers and extensive assessment centre programmes.
A Replacement Chart is prepared and it gives the list of existing key
executives and brief reference to their possible successors. The
replacement chart shows who will replace whom as and when there
are job vacancies at higher levels in the organisation.
3. Grooming the potential successors – They should be given
challenging and demanding assignments which will stretch their
competencies and provide rich experience. Regular feedback will
enable them to compare their progress again plans. Mentors and
coaches could guide the bright people.
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High Potential Employees are those individuals who are recognised as
likely future leaders within the organisation. They show high level of
performance and have potential to assume greater responsibilities.
Many companies develop programmes for such select group of
employees to enable them to move faster and take higher positions in
the he organisational hierarchy. Examples: High Potential Employees
Programme, Fast Track Employee Programme etc.
4. The company should develop policies, procedures and practices to
take decisions in the following areas as a part of succession planning
process-
(a) Should be develop internal candidates or recruit competent people
from the market?
(b) Should we go by candidates’ potential or performance or both
while preparing succession plans
While succession plan is required by all companies, most managers
and private companies do not take much interest in succession
planning and developing people in advance for key organisational
posts. Many public sector undertakings, nationalised banks and
financial institutions remain without chief executive officers for a long
time due to political interference.
In owner- managed private companies, the family members occupy
top positions even though may not have the expertise and experience
in running the business. The situation is changing and in many cases
(Example- Bajaj, Ranbaxy, Birlas, Apollo Hospitals etc.), the sons and
daughters undergo management training and also get trained inside
the organisation before taking up board level positions.

Succession Planning – 6 Steps Involved in the Process

Succession planning requires steps to obtain leadership guidance,
collect relevant information, make key decisions, and execute
succession and development actions. If undertaking this activity for
the first time, you should consider creating a process that is “separate”
from other, related activities such as – performance management and
development planning. Later, after you have executed your process a
couple times, you may take down the special elements and start to
integrate it with these other activities.
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The steps below outline such a stand-along process:

Step # 1. Define Purpose, Goals, and Scope:
The top leader of the organisation outlines the purpose, goals, and
scope of the succession planning activity.
Step # 2. Assemble an Oversight Committee:
The committee’s role is to establish a succession planning process that
can fulfil the purpose, goals, and scope outlined by the top leader, and
to govern over the process until most of the major questions and
issues have been resolved.
Step # 3. Set Policy:
The oversight committee creates policy around such issues as data
security, assessment, succession nominations, communication and
development.
Step # 4. Define Operational Parameters:
Again, this is the purview of the oversight committee. Operational
parameters include; positions for which successors will be nominated,
the scope of the pool of succession nominees and the rating scales
used for assessing contribution and potential.
Step # 5. Develops and Conduct the Assessment:
The assessment is essential for comparing succession candidates and
slotting them against specific succession positions. The assessment
data, generally provided by direct managers of the succession pool,
should be reviewed for equity in the rating and for consensus in the
nominations.
Step # 6. Compile and Organise the Data:
The voluminous data that is collected must be compiled into the kind
of information needed by leaders to make key decisions. Some of the
compilations include – coded organisation charts, a “contribution-
potential matrix,” reports of any “at risk” positions or individuals, and
profiles for all individuals and positions. A spreadsheet or dedicated
tool for organising and displaying such information is recommended.
Step # 7. Conduct Organisational Reviews:
Starting with business unit/functional heads, the succession plan and
reports compiled are reviewed and key decisions made. These
decisions could range from developmental opportunities for future
leaders to actual leadership appointments. The business
unit/functional level reviews are followed by reviews at the highest
level – with correspondingly higher level decisions.
Step # 8. Implement Development Plans:
While succession decisions may be executed immediately after the
reviews, the developmental opportunities must be pursued over the
following weeks and months. For future leaders to realise their
potential and be better positioned to “step up” when the time comes,
these development opportunities must not be allowed to languish once
the spotlight is off the succession planning process.
Step # 9. Assess Process Effectiveness:
Like any other business process, your succession planning process will
need to be improved, streamlined, integrated with other human
resources processes and possibly expanded to accommodate
additional participants. While the experience is fresh, take a moment
to gather feedback and assess process effectiveness – then set and
achieve the most critical improvement objectives.

Succession Planning – Difference between Succession

Planning and Career Planning
These two terms are not synonymous, but they are similar as far as the
objective is concerned. Succession planning is required for key
positions while career planning covers all executives and employees in
highly skilled/operative positions. Career planning includes
succession planning and both are interdependent.
Difference # Succession Planning:
1. Succession planning is the important process which involves
identification of individuals or employees as the possible successors to
the key or very senior positions in an organisation in which such
position become vacant. Thus, in short, succession planning focuses
on the identification of vacancies and locating probable successor.
2. In succession planning, the focus of attention is the persons who
can occupy the vacant post.
3. Succession planning is essential for all those who operate in key
functional areas and also for key managerial cadres that are likely to
become vacant.
4. Succession planning is usually for 2 to 5 or 2 to 7 years period for an
individual but it is a continuous exercise for an organisation.
5. The important objective of succession planning is to identify the
most suitable, potentially qualified, efficient, skilled and experienced
employees or individuals to occupy or succeed to key positions when
they become vacant.
Career planning and succession planning are very important from the
viewpoint of an organisation and its employees. Career planning helps
to integrate the employee’s needs, aspirations with their
organisational requirements. Perhaps, it is one of the important
challenging task which has assumed great importance in the present
century since organisations are becoming keenly interested in
attracting, retaining and utilizing the potential of highly talented,
efficient, technically specialized, professionally trained and well
experienced experts.
It is also found that some organisations also think properly and pay
attention to succession planning wherein those executives possessing
the desired skills and potentials are systematically identified and
efforts are made to develop the appropriate executives to hold the
position in future. Career Planning and Succession Planning, though
are different, act as one of the important tools for harnessing the
human potential in which top- management, Human Resource
Managers have a major role to play.
Difference # Career Planning:
1. Career planning is the process or activities offered by an
organisation to the individuals or its employees to identify their
strengths, weaknesses, specific goals and the jobs they would like to
occupy. Through career planning, the employees and individuals
identify and implement steps to attain their career goals.
2. In career planning, an organisation is concerned with strategic
questions of career development.
3. Career planning is a must for all managerial cadres and posts.
4. Career planning’s basis is long-term till the retirement of the
employment contract.
5. The important objective of career planning is to explore the
opportunities to enable the individual employees to grow and to
develop and also to encourage or motivate them for self-development.

Succession Planning – Top 6 Advantages

Succession planning are advantageous in the following
ways:
i. It is an effective way to connect the organization’s vision, mission
and corporate objectives to the human resource strategy and plan
ii. It is an effective way of ensuring that the organization is prepared in
case of any planned or unplanned exit of employees at senior levels.
iii. It ensures that there is a process to prepare employees for higher
roles
iv. It demonstrates the organization’s commitment to career
management of its employees
v. It helps the organization in choosing the right set of candidates that
will fit into not just current job roles but also from a futuristic
perspective
vi. It expresses a sentiment that the organization cares about its
employees and about their careers.
Without a succession plan, it is difficult for an organization to sustain
its business effectiveness. Only with a succession planning process, it
is possible for a business enterprise to ensure that all core processes of
the organization are sustained beyond the persons driving them.
Succession Planning – 10 Major Challenges Pertaining
to Succession Planning
Challenges pertaining to succession planning include the
following:
Challenge # 1. Target Group:
Some organizations focus all succession planning efforts only on those
employees whom the HR department has identified as having high
potential while others extend it to all employees. There is a risk
involved in both of these decisions. If you only include high pots in
your succession planning endeavour, then majority of the workforce
(who are outside the high pot list) are likely to feel left out and
neglected.
This will have both short-term and long-term impact on their
performance. Short-term productivity may drop due to dip in their
morale and long-term retention of these employees may prove to be a
challenge. The problem with extending the succession planning
process to all employees is a criminal wastage of organizational
resources.
Preparing workforce for higher roles includes investing lot of
organizational resources such as training, coaching and other special
assignments to groom the candidates. Investing organizational
resources such as time, money and energy to groom all employees may
be a daunting and wasteful endeavour.
Challenge # 2. Make or Buy Decision:
Make refers to developing leaders internally and buy decision refers to
hiring candidates from the external market. Succession planning does
not always mean grooming people within the organization. Sometimes
the organization may also decide to hire externally. It is interesting to
discuss both these possibilities. While succession planning through
internal sources seems more advantageous to the organization from
employee motivation, employee engagement and employee career
management perspective, sometimes, it may not be the best decision.
When an organization needs to challenge its current way of thinking,
push people out of comfort zones, enter new markets and domains. It
is usually more beneficial to hire external leaders than to groom
internal talent for taking on high level positions in the organization.
Challenge # 3. Role of Diversity:
It is human tendency to seek people who are similar to us in matters
that are important such as religion, community, case, language or
profession for that matter. Leaders often instinctively choose to
mentor employees who are like themselves which often leads to a
group of ‘similar’ executives leading organizations.
If organizations can consciously play down this tendency, it will lead to
more diverse and rich talent getting more opportunities for
advancement and career development. For example, most
organizations now have mandatory targets for certain percentage of
board to be represented by women executives.
Challenge # 4. Top Management Commitment:
A fantastic career development initiative by the HR department can go
down the hill if it does not have the necessary top management
support and commitment. To maximize the possibility of obtaining top
management support, HR department can use strategies such as using
influence tactics to discuss about the process in semi-formal and
informal forums, using political tactics to get their buy in and building
and presenting a business case for succession planning.
Challenge # 5. Sizes of the Organization:
Some firms are small in size and hence may not afford ample
opportunities for career advancement for all employees. Typical
problems associated with such companies are that talented workforce
exits the organization early in career as they sense lack of career
opportunities within the set up. Many family run businesses may
experience this situation.
Challenge # 6. Strain on Financial Resources:
Succession planning is a costly affair as it involves training of the
identified employees on specific business skills and otherwise.
Training comes at a cost. Succession planning puts a financial
pressure on the company not just by training costs but also
opportunity cost of mentoring and coaching the identified employees
by existing senior leaders of the organization.
Challenge # 7. Difficulty in Identifying the Right Set of
Employees:
The organization may identify employees for succession planning
based on their current levels of performance and current levels of
competencies. They may plan a career development intervention
focusing on raising the person’s level of skills and knowledge.
Enhancing one’s competencies does not necessarily increase one’s
level of interest and personal motivation. It is easy to identify skill
gaps but extremely difficult to identify interest levels of employees.
Also, interest levels may change over time and the entire endeavour
might eventually become futile.
Challenge # 8. Appropriate Timing:
Since some separations such as retirement can be planned while
others such as death, resignations, terminations cannot be perfectly
planned. There is a lot of uncertainty about the availability of high
posts for identified and ready employees to take over. Thus the exact
timing of the same cannot be predicted. This becomes a major issue
impacting success (or failure) of the succession planning process as
once the employee is ‘made ready’ (s)he may not have the patience to
wait for too long, leading to talent loss to the company as the person
may look for greener pastures.
Challenge # 9. Communication:
One very important and often overlooked aspect of succession
planning is explicit and clear communication. Sometimes when senior
leaders observe the effort at grooming second in command employees
for higher roles, the senior leaders sometimes feel insecure about their
positions. The entire purpose, objective and intent of the succession
planning drive have to be communicated both formally and informally
to the senior leaders, so that communication gaps do not create more
chaos than benefit.
Challenge # 10. Psychological Impact:
At the end of the day, it is the psycho-social drive and personal energy
of employees that impact their performance at work and their decision
to stay or leave. If employees are geared up for higher roles and if they
are not given those assignments within a reasonable frame of time, it
may lead to a negative psychological impact leading to high attrition
that too of very talented employees.

Succession Planning – 4 Practical Ideas on How you

can get more Impact from your Organisation’s
Succession Planning Efforts
One of the most common leadership development questions that I
hear from executives is, “Why does succession planning feel like such a
waste of time?”
Many of the CEOs we talk with these days express concern about the
lack of bench strength in their companies. They are very worried that
they lack sufficient “ready now” candidates to replace planned &
unplanned losses of key leaders. As a result, the future continuity and
performance of the business is at risk.
These same executives also tell us that their companies have been
doing succession planning for years. On average, the executives we
meet give their succession planning process a grade of C+ and they
give their execution of succession plans a grade of D. If you are among
the companies who are not happy with the impact of your succession
planning process, you have plenty of company.
Here are four practical ideas on how you can get more
impact from your organisation’s succession planning
efforts:
1. Change the Name of the Process to from Succession
Planning to Succession Development:
Plans do no develop anyone – only development experiences develop
people. We see many companies put more effort and attention into the
planning process than they do into the development process.
Succession planning processes have lots of to-do’s – forms, charts,
meetings, due dates and checklists. They sometimes create a false
sense that the planning process is an end in itself rather than a
precursor to real development.
Many humans fall into the same trap regarding physical fitness. We
have may fantastic plans in place to lose weight. We may be very
proud of our plans, which include detailed daily goals for diet, alcohol
consumption, and exercise. And if our execution were half as
impressive as our planning, we would be very svelte. Our focus should
be on weight loss, not planning for weight loss.
2. Measure Outcomes, Not Process:
This change of emphasis is important for several reasons. First,
executives pay attention to what gets measured and what gets
rewarded. If leadership development is not enough of a priority for the
company to establish goals and track progress against those goals, it
will be difficult to make any succession planning process work.
Second, the act of engaging with senior executives to establish these
goals will build support for succession planning and ownership for
leadership development. Third, these results will help guide future
efforts and mid-course corrections.
The metrics a company could establish for Succession Development
might include goals like the percent of executive level vacancies that
are actually filled with an internal promotion vs. an external hire, or
the percent of promotions that actually come from the high-potential
pool. Too often, we find companies measure only the percent of
managers that had completed succession plans in place.
3. Keep it Simple:
We sometimes find companies adding excessively complex assessment
criteria to succession planning process in an effort to improve the
quality of the assessment. Some of these criteria are challenging even
for behavioral scientists to assess, much less the average line manager.
Since the planning process is only a precursor to focus the
development, it doesn’t need to be perfect. More sophisticated
assessments can be built into the development process and
administered by a competent coach.
4. Stay Realistic:
Following are two classic examples how succession plans
may lack realism:
The head of engineering is a high performing leader who has the
potential to be COO. She has always been in an engineering role. If she
had sales experience, she would be even more ready to be the COO so
her development plan is written to include a job move to be head of
sales.
However, this company would never take the risk of putting someone
without sales experience in the top sales job – so her development
plan perpetually says, “move to a sales job” even though that will never
happen.
The CFO is a high performing leader who has passed ail the
assessment criteria to be a high potential, ready-now candidate for the
CEO job. He is told he is the top candidate. However, the CEO can’t
stand the guy, and as a result, he will never get the job as long as that
CEO has a say in the matter.
While development plans and succession charts aren’t promises, they
are often communicated as such and can lead to frustration if they
aren’t realistic. Bottom line, don’t jerk around high performing leaders
with unrealistic development expectations. Only give the promise of
succession if there is a realistic chance of its happening!
We believe the four suggestions above can help shift your
organisation’s focus from planning to development – and achieve
increased depth in your bench strength.

5 Step, Important Process in Succession

Planning
Developing and identifying new leaders for a company or organization is widely
considered as a process which often called succession. Succesion of leader begin
when old leaders die or retire, and it usually aims for preventing a power vacuum
or continuity of leadership. In an empire, succession planning is identical with that
of order of succession, whereas in business it has a main purpose, that is, to choose
the right individual who has potential to fill leadership positions. So it is quite
crucial for every business development. Take this as a process of screening, in
which a person will be prepared to assume the role of leadership as s/he become
available.

If we take such term in a narrow understanding, there is key role namely

“replacement planning” which become the essence of succession planning. Every
business will through this process, so it is safe to assume that the planning is
common under the very modern meaning of industrial society. There is a 5 step
process in every replacement planning, including:

 Critical positions must be identified

When talking about succession planning, the main focus is to identify each and
every critical positions available within a company. This must be done in order so
that a business or company be able to meet its business objectives. At which point,
demographic analysis and workforce projection data is essential, as the both help a
company or organization in identifying risk areas available. A company or
organization can also compared and conduct a risk assessment to future and
current vacancies. With these schemes, a company will be able to identify critical
positions within a specific agency or department.

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on Competency-based HR Management
System and Human Capital Strategy
● Identification of competencies

A company must have a clear understanding of capabilities needed and required

for successful performances in some areas which considered as important and
critical. In this sense, critical positions became essential particularly for assessing
performance, get a set of performance expectations, and for guiding development
and learning plans.

 Succession management strategies need to be identified too

If both critical positions and competencies have been identified, a company need to
do the next step. It is choosing dish that is listed on several management/human
resource strategies, including recruitment, onboarding, and developing internal
talent pools to address succession planning.

● Implement and document succession plans

If strategies have been identified, the next step is to document them in a plan of
action. The latter provides a specific mechanism for clearly dividing responsibilities
and roles and time lines. This considered as one of the most important focuses
within the whole process of succession planning.

● Lastly: evaluate effectiveness

A company that execute succession planning must realize the importance of

making necessary adjustments, evaluate activities, and monitor workforce data. All
of which should be done in a systematic way. Furthermore, it is done to make sure
that the planning efforts are successful.

These 5 step process are considered important for each planning that involve
succession of a leader within an organization or business. One of them can not be
ignored, and each points complement the other points.

Hofstede’s cultural dimensions theory is a framework for cross-cultural communication, developed by

Geert Hofstede. It shows the effects of a society’s culture on the values of its members, and how these
values relate to behaviour, using a structure derived from factor analysis.

Geert Hofstede in his research succeeded in identifying six characteristic models to measure a culture in
cross-country society. The cultural dimension represents an independent preference for one of the
above circumstances other countries that distinguish countries (not individuals) from one another.

Hofstede developed his original model as a result of using factor analysis to examine the results of a
worldwide survey of employee values by IBM between 1967 and 1973. It has been refined since. The
original theory proposed four dimensions along which cultural values could be analyzed: individualism-
collectivism; uncertainty avoidance; power distance (strength of social hierarchy) and masculinity-
femininity (task-orientation versus person-orientation). Independent research in Hong Kong led
Hofstede to add a fifth dimension, long-term orientation, to cover aspects of values not discussed in the
original paradigm. In 2010, Hofstede added a sixth dimension, indulgence versus self-restraint.

Hofstede’s work established a major research tradition in cross-cultural psychology and has also been
drawn upon by researchers and consultants in many fields relating to international business and
communication .

Dimensions of national cultures:

Power distance index (PDI): The power distance index is defined as “the extent to which the less
powerful members of organizations and institutions (like the family) accept and expect that power is
distributed unequally”.

Individualism vs. collectivism (IDV): This index explores the “degree to which people in a society are
integrated into groups”.

Uncertainty avoidance (UAI): The uncertainty avoidance index is defined as “a society’s tolerance for
ambiguity”, in which people embrace or avert an event of something unexpected, unknown, or away
from the status quo.
Masculinity vs. femininity (MAS): In this dimension, masculinity is defined as “a preference in society for
achievement, heroism, assertiveness and material rewards for success”. Its counterpart represents “a
preference for cooperation, modesty, caring for the weak and quality of life”.

Long-term orientation vs. short-term orientation (LTO): This dimension associates the connection of the
past with the current and future actions/challenges. A poor country that is short-term oriented usually
has little to no economic development, while long-term oriented countries continue to develop to a
level of prosperity.

Indulgence vs. restraint ( IND ): This dimension refers to the degree of freedom that societal norms give
to citizens in fulfilling their human desires. Indulgence is defined as “a society that allows relatively free
gratification of basic and natural human desires related to enjoying life and having fun”. Its counterpart
is defined as “a society that controls gratification of needs and regulates it by means of strict social
norms”.
1. Define key work positions and their roles to assess what makes them critical for the company

Not every job is hard to fill. Every organization has easily replaceable people with basic work skills.
However, some positions are critical to the success of your business. Important jobs drive revenue and
your company’s growth hinges on their productivity. Roles like account managers and decision makers
are more difficult to fill. You need people with integrity and customer-facing personality skills who will
represent your brand in a positive light.

Company leaders, including supervisors, managers, and team leaders at every level can also affect your
bottom line. Efficient managers influence performance and drive productivity while bad managers are
more likely to do the opposite.

That’s why data-driven hiring decisions are important to your company’s health and growth trajectory.

2. Construct success profiles for each role and identify top candidates for succession
Success profiles detail the skills, abilities, and personality types needed to be successful in a job. Using
your most productive employees as examples (employee benchmarking) helps you create a job baseline
of skills and personality traits to identify candidates most likely to succeed in each job.

You probably already have a sense of who some of your top performers are. But with personality and
skills testing, you could find some people who have the right leadership traits or to become highly
successful in a particular role, but are currently under the radar. With the right career development
opportunities, they’re more likely to stay with your company and help it succeed.

3. Conduct a competency gap analysis to pinpoint which skills need to be developed for the future

It’s not unusual for a company to be oblivious to weaknesses. Conducting a skills gap analysis will reveal
weak areas and highlight strengths, so you can tailor training accordingly.

Having a better understanding of your workforce will show you where people need more training or
mentoring. Ongoing employee testing will also help you understand whether your training or mentoring
programs are effective.

As you’re developing training and mentoring programs, think ahead for future needs and consider which
employees might be appropriate to step up if someone above them steps down. Train not only for the
job the employee holds today, but for the role they might fill in the future.

4. Establish succession development plans for critical work positions to future-proof your business needs

What happens if your highest producer suddenly leaves the company without notice? Life-changing
events happen all the time, meaning you may need to fill that position with little or no notice. If you
make a mistake, your company could lose revenue, damage its reputation, or introduce toxicity into
your carefully nurtured culture.

With a succession plan in place, you’re prepared no matter what happens. You’ve already identified
others who can step right into the role and have a success profile for a vacated position. Being ready for
anything gives your business continuity. Instead of scrambling to fill a critical role with anyone readily
available or overwhelming other employees with important tasks they may not be qualified to handle,
you can implement your plan with confidence for a smooth, seamless transition.

5. Create development plans for individual employees to grow their skills

Once you’ve identified employees for a range of roles, you’ll want to create onboarding, mentoring, and
training programs to help them develop the skills they need to stay and grow.

By identifying the key traits and skills for each position, you can put together career plans and mentoring
programs to help ensure people are trained for the future. Having clear career plans in place to help
employees set, monitor, and reach goals has many benefits. Helping your employees achieve career
goals and promoting from within creates a strong company culture. It also makes for a happier
workforce, inspires higher productivity, and reduces employee turnover.

6. Establish and maintain workforce skills inventory to use in your future hiring or job promotions

Finally, by testing your current workforce, you’ll probably find some people who have “hidden” traits
and skills that you’re not using to their full advantage. Don’t let those skills and traits go to waste. Look
for ways to use employees’ natural talents.

By including testing as part of your business strategy, you’ll not only improve your hiring and
development processes, but help employees succeed and better prepare for the future of your
company.

At the same time, you’ll create a skills inventory for your company. If you have a departure, you may be
able to search your database for the skills and personality traits you need. You can find the perfect
replacement under your own roof.

7. Review and adapt the succession planning process to any changes within the organization

As your business grows, your needs will change. Your succession plans need to be reviewed periodically
to ensure each job success profile continues to align with the goals and strategies of the company. An
outdated plan is no plan.