Continuity and sustained
development of business entities largely dependent on how they manage
the change
By SHABBIR H. KAZMI
June 10 - 16, 2002
With the passage of time organizations become
institutions which need sustained leadership achievable only by
following a pragmatic succession plan. It is a very critical issue which
deals with human being, the most unpredictable element. The Management
Association of Pakistan recently held a seminar to dwell upon the
important topic of 'Succession Planning in Corporate Sector.' The
speakers included Zia Shafi Khan, Zaffar A. Khan and Omer Shamim Safari.
In his opening remarks, Zia Khan said, "It is a
complicated process and a successful plan is based on management
structure, regular review through evaluations and integrated management
development system. Only one tenth of the expertise of professional
managers consist of formal education and training and the result is
attained through on the job development. Management structure has to be
clearly understood by all and regularly reviewed for future planning.
One of the reasons for the gradual and slow eradication of business
groups of yesterday is that they failed in managing the change. The plan
does not mean identification of an individual to replace his/her
predecessor. It means identifying a group of individuals to be trained
and groomed for the position of CEO."
Engro Chemical Pakistan (formally Exxon Chemical
Pakistan) is often said to be the best managed corporation of Pakistan.
It was established by one of the leading conglomerates in sixties.
However, when the parent decided to divest from fertilizer business, its
share were bought by the employees. It (Engro) also has the distinction
of being the only fertilizer plant in the world owned by the employees.
Engro has not only inherited the policies of the conglomerate but also
improved its management standards since the takeover including human
resource development, a often overlooked area.
President of Engro, Zaffar A. Khan, explained in
detail the plan being followed by the company. His basic contention was
that with the passage of time business organization should become
institutions requiring sustained leadership. This can be achieved only
through succession planning. This requires formal appraisal and at least
five-year future positions plan. The full career plan for 'high
potential' (hipo) employees.
In Engro retirement means respect and the company
assigns priority to employees' development over job needs. The company
offer employee development opportunities through: on the job learning,
superior coaching and counseling, formal training programmes and job
orientation for hipos. All these facilities not only help in employees
development but also help in preparing the incumbents expected to occupy
key positions.
Omer Shamim Khan, a consultant and commonly known as
'head hunter' emphasized the need for succession planning in the
corporate sector. He said, "The companies have to decide today for
tomorrow through a complex appraisal system for the human development,
which is most uncertain." Business environment is getting
increasingly dynamic, corporate growth, rate and size is crucial, values
are changing which offer good business opportunities for head hunters.
To achieve the objective the process begins from
recruitment, needs periodic appraisal and a flexible plan. Promotions
are common and job rotation is a must to expose the incumbents to a
variety of experience, i.e. sales, finance and even manufacturing. The
basic criteria remains performance but potential also play a very
important role.
To undertake such a complex process it is necessary
to understand the challenge well in advance and act with commitment.
Focus should be on performance as well as potential keeping in view the
controllable challenges. The companies must differentiate between
expenditure on personnel and investment in employees development. It is
a fact that some of the corporates look after their senior executive
very well but hardly invest in budding leaders.
One of the factor which has been a major impediment
in succession planning is hardly any separation of management from
ownership. Some of the leading groups vanished because they failed to
read the change and to induct professional managers. People often assume
that a manager by profession and a professional manager is one and the
same. To face the emerging challenges corporates need more versatile
managers.
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