The notion of backing up valuable resources is nothing new to IS managers and staffers. If you've got a heavily trafficked server, a crucial piece of programming or just some important files, you're safer with fallbacks for each.
That way, if the system crashes or a virus attacks, you've still got everything under control. Now imagine the same kind of backup, only on the corporate level, with IS personnel themselves. It's called succession planning, and more and more companies are using it to back up their most valuable people -- in case one leaves unexpectedly or can't otherwise fulfil his or her responsibilities. And it works.
Once a strategy used only in developing the business side of corporate operations, succession planning is becoming more common within IS divisions.
Experts see the move as a "human insurance policy" and agree that succession planning is as important to IS as it is to other departments.
"It's a smart company that has its CIO and top IT brass backed up internally," says Mark Polansky, managing director of the IT practice for Korn/Ferry International, an executive search firm based in New York City. "Given the mobility and demand level for good IT people, a company doesn't want to leave itself vulnerable to having a vacancy in a crucial position at a crucial time.
Backing up your top positions just makes sense."For some IT departments, adhering to comprehensive succession planning policies is routine. Such is the case at Xerox Corp, a company that has capitalised on one of the oldest and most weathered IT succession strategies in the country.
Corporate vice president and CIO Patricia Wallington says succession planning -- known to Xerox employees as Management Resource Planning -- is a major developmental tool in every department and has been a part of the company's IT substructure for almost 25 years. "Every one of our upper-level managers is supposed to be able to name two or three replacements, on the spot," Wallington says. "It comes with the territory -- you're expected to know your budget, your list of daily meetings and your backups."Xerox's MRP program is an annual procedure coordinated by the Stamford, Connecticut company's human resources department; Xerox HR director Bob Monastero says more than 65 per cent of all positions in the company's IT department have been filled through this process. The company proceeds with MRP even if there are no jobs to back up. Every year, employees complete questionnaires and self-assessment forms that are then reviewed by IS managers.
The managers, in turn, evaluate their employees based on the employee self-assessments and personal interviews. Both files are entered into an HR database that is reviewed by department heads, vice presidents and the CEO.
When the annual procedure is completed, each employee is assigned a succession planning status distinction: ready to fill a new position within one year, ready in one to three years or not ready at all.
Through this process, Wallington says, talented staffers not only are considered for promotions but also receive increased visibility among the managers who have the most influence in advancing the staffers' careers.
"As important as succession planning is for a company, it's also a useful career planning vehicle for the staffers themselves," Wallington says.
"Succession in the [IT] field relies heavily on credibility among the senior executives, and the more familiar a name or a face, the more of a chance that person has to move up and on in the company and in his or her career."Once it is known a position will become available, an IS manager makes a list of potential backups and interviews those employees. During these second interviews, the MRP evaluations are discussed. Potential backups are asked to role-play ("If you were in these shoes, how would you handle this situation?") and explain why they are qualified to back up the job in question.
After the interviews, a decision is made. Candidates are usually invited to fill positions immediately, and 9 out of every 10 candidates accept. Of those who demur, some explain that they don't want the added responsibilities (and the accompanying stress) of becoming a backup. Others express a desire to remain in their current positions.
While the procedure of choosing backups is mostly successful, sometimes it can leave egos badly bruised. "We've had instances where the whole notion of having a backup and knowing who it is makes [an incumbent] paranoid," says Wallington.
"A person begins to wonder: 'Why do I need a backup? Does that mean I'm not good enough?'" There's no "right" way to answer questions like these, but Wallington says she usually responds by reminding the employee that succession planning is about the company's future, not individual accomplishments.
"You'd think everyone would see planning ahead like this as a good idea, but not everyone does," she says. "While your primary objective is ensuring the company's survival, it's also important to keep in mind that behind every position is a living, breathing person who often has worked a lifetime to get where he or she is. That's not something to take lightly."While Xerox's IS department has benefited from having a succession strategy, across the state line in Pleasantville, New York, The Reader's Digest Association Inc's IT department suffered in the past from not having one. The Digest, a publishing and direct marketing company with offices in more than 40 countries, didn't have a formal IT succession plan until last summer. When the company's former CIO left more than two years ago, the IS department limped along for almost 18 months without a CIO. IS staffers describe the year-and-a-half before current CIO David Starr's arrival in spring 1997 as perhaps the worst technical and financial chaos they had ever seen.
"We're a perfect example of the kinds of bad things that can happen when you don't cover your behind," Starr says. "If it were the CEO or CFO who had left, there'd have been a long list of people ready to fill the spot. But with us, until the company was faced with this major IS leadership catastrophe, nobody ever thought it was at all important to back up the [CIO] position."When Starr's predecessor became CIO in 1989, the company was running seven mainframe systems: one in the United States and six in other parts of the world. In late 1993, he began planning an unprecedented scale-down to reduce the number of systems to two. But when he resigned unexpectedly in late 1995, those plans were abandoned. Within six weeks of his departure, three of the Digest's five IT directors left as well. Without a succession strategy, Digest executives were faced with an IS department short four key players and an IT infrastructure in total disarray.
Reader's Digest began searching for a replacement CIO and in the interim outsourced much of its IT work to consultants at significant cost. The company's IS offices around the world, suddenly without leadership from headquarters, took charge of their own systems, developing them to serve their individual needs.
Enter Starr, fresh off a three-year stint as CIO of ITT Corp. Company executives made it clear they would not make the same mistake twice: they told Starr to plan for the future from both a technological and a managerial point of view. Starr had experience in both areas. "When I was at Citicorp, before I went to ITT, we used to have charts pinned to the walls of an office showing who backed up whom," he says. As at Xerox, "everybody, from the programmers to the custodians, had someone ready to fill his shoes".
Within six weeks of joining Reader's Digest, Starr implemented a companywide IS succession planning policy tied to the HR review process. When Starr and his IT directors reviewed employees, they asked them questions like, "If you were to see someone taking over your job after you've left, who would it be and why?" and "Think of it like a police drama; who'd be your first choice to cover your back?". He also worked with staffers he considered particularly "confident, ambitious and intelligent" to identify positions for which they wanted to be backups. To make sure the same process was used throughout the company, Starr met via videoconference, phone and e-mail with IS managers in the Digest's various outposts. With few exceptions, staffers appreciated the attention, which they indicated in periodic HR surveys.
Today, almost every upper-level IT employee at Reader's Digest has a backup. In some cases, the backups have backups. Other positions have "pools" of eligible backups, any member of whom could fill that job at a moment's notice. Backups are reminded that they are part of a plan for the future, so as not to make anyone antsy about job security. All succession information is documented, and when an IS position becomes available, Starr checks the files first. If a backup has been determined previously, the position is filled without fanfare before it ever becomes vacant. If no backup has been tapped, or if a backup doesn't want to fill the position for which he or she was chosen, the internal search begins anew. Going outside the company is a last resort and is a move that only Starr and his direct reports can decide to make.
"The strides we've made already show that an informal strategy of worldwide succession planning has given us the broadest possible pool from which to choose the most qualified people," Starr says. "But even if you don't choose backups, it's a great exercise to have your staffers think about who'd make a good backup."Careers are always touchy subjects. Depending on a company's previous experience with succession planning, some strategies may work better than others at increasing both staff morale and department efficiency. And while most succession plans help companies brace for the future, preparing for what lies ahead isn't important to everyone. So says Steve Zarate, CIO of PeopleSoft Inc, a California-based provider of enterprise application software.
"There are lots of factors at work in a young, fast-growing company like ours that would work against a planning strategy," he says. "We have a very entrepreneurial atmosphere here, and among [newer] companies, it seems that it makes more sense for IT people to take any job they'd like. Careers are serendipitous, and the less structure and bureaucracy a company has, the less succession planning [it will have]."While Zarate sees the benefits of a planning program like those at Reader's Digest and Xerox, he says such formal strategies are more the exception than the rule for companies like PeopleSoft. "On our level, it's not a linear kind of thing in the sense of vertical advancement," he says. "Instead, careers for most IS people under 30 tend to go in a zigzag pattern. If there's confusion, you've really got to ask yourself, 'Is this succession program really good for my staff?' If so, go for it. If not, then building a talented group of people doesn't [have to] include someone to step into the boss's shoes; it just [has to] include talent."Succession plans are as different as the companies that use them. For a company like Reader's Digest -- one whose IT department went without a developmental planning policy until very recently -- a relatively basic strategy like Starr's, run by the CIO with assistance from HR, works best. For companies like Xerox -- organisations in which contingency planning is as entrenched as management itself -- multitiered plans that include compiling a database of evaluations and conducting corporate-wide executive reviews are more the norm.
For rapidly growing newer companies that rely on a younger staff, like Zarate's PeopleSoft, succession planning isn't as important as aggressive hiring policies and attractive benefits.
The key to figuring out which strategy works for a company is first to identify just how extensively it should back up its top IT positions, according to Korn/Ferry's Polansky. After that, Polansky says, it's just a question of understanding what you expect from your potential backups and what your potential backups expect from you.
"As succession planning becomes more and more widespread among IT departments and staffs, we should see companies experimenting with which kind of planning works for them," Polansky says. "As every CIO has learned at one time or another, experimenting works only if you're actively seeking input. If staffers like a succession plan, more of them will want to get involved. If not, you'll find it's a lot harder to find backups when and where you want them."Matt Villano is a freelance writer based in Boston. He can be reached via e-mail at firstname.lastname@example.org.
Take these steps when planning the succession of your IT all-stars.
Identify replacement candidates for key jobs. Look at previous experience, track record and demonstrated competencies, or determine who could learn most from having the job. Classify candidates identified on the basis of previous experience as "ready now"; label those identified on the basis of potential as "ready later". Establish a rigorous training or orientation program for those candidates ready later, and reward those who are ready now by occasionally letting them participate as if they had already taken over the positions they're slated to back up.
Pay the most attention to the most critical jobs. While this tip sounds obvious, too many times it is overlooked. If your company lacks both a CIO and a top director, even if you have "ready now" backups for the lower-level position, focus on filling the top position first. Trickle-down planning works best, no matter how many vacancies you might face.
Document, document, document. Informal succession plans, though sometimes worthwhile, often create further confusion and disarray. Once you initiate the backup process, be sure to commit everything to writing. With hard copies of every decision, you avoid personal bias at all levels and avoid employee uneasiness about the planning process. Often the procedure is documented by HR, but depending on the company, succession strategies can also be followed within a division by, say, a succession chairperson.
Remind your employees that succession is about the company's survival, not about them personally. Many companies refer to planning for the future as contingency planning for this reason -- some employees feel threatened by the idea of backups waiting in the wings. Emphasise the future, not the current act of backing up, and your employees will be much more comfortable with the entire process.
Adapted from High Flyers: Developing the Next Generation of Leaders (Harvard Business School Press, 1998) by Morgan W McCall, Management and organisation associate professor at the University of Southern California's Marshall School of Business
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