Manpower Planning

Manpower Planning: Compulsion or Safety Net

Introduction

On October 24 2006, the core team of ICICI a week before its joint Managing Director Lalita Gupte retired, was reshuffled. Chanda Kochhar, deputy Managing Director who led the bank's retail business was given Gupte's portfolio of international banking; V. Vaidyanathan, a senior General Manager who had built ICICI's retail business alongside Kochhar, was elevated to the level of Executive Director.

At ICICI Prudential, the bank's life insurance joint venture Bhargava Dasgupta was made Exective director so that Shikha Sharma, Senior General Manager if and when required can take a position in the parent company. The giant universal bank's Managing director and CEO, K.V. Kamath, is pushing 58, and has just two years to go before his retirement. It can't be ruled out, he seems to have made it clear whom he considers as potential candidates for the bank's top job.

When Coca Colas CEO Roberto C. Gozueta suddenly died of treatable lung cancer in 1997 there was a great deal of shock and sadness at Coca Cola. But the company other than loss of Roberto was not disrupted as within his tenure Roberto had already selected and groomed a replacement M. Douglas Ivester, the process had started way back in 1983. L&T despite of increasing the retirement age of its directors to 67 is facing a leadership crunch, as most of its directors such as J.P.Nayak, K.Venkatramanan, and Y.M. Deosthalee are 63,61 and 60 respectively and with no clear successors available they will have to rely on outsiders or have to extend the retirement age or call retired top notch's to run the company.

CEOs come and go but organizations cannot be allowed to die an untimely death just because the directors were not able to find a right replacement for the company. "Organizational survival and growth are the most important responsibilities of top management of all organizations. These responsibilities can best be fulfilled by planning a management succession plan to ensure the availability of the right people to provide for continued vitality and strength." (Dr. P.N. Singh).

Age and death are no longer the key reasons for a vacancy at the top position, with the rapid industrialization, more lucrative options and profits increasing to unthinkable heights, corporate governance is gaining further grounds the stakeholders like institutional investors are becoming more demanding regarding the companies leadership and overall performance leading to the shrinkage of a CEOs tenure from 9.5 years to 7.6 years, and two out of every five new CEOs fail in the first 18 months.

But the organizations cannot afford a turbulent and instable environment anymore. With the rapid industrialization, companies going into the merger frenzy, local market becoming global and companies competing with each other at virtually every front, the top management cannot function in an environment of uncertainty in the organization regarding succession, they have to provide an answer to the question "who's next"?

Manpower planning is not confined to hiring and retaining talent as general notion persists, but it is also anticipating future manpower needs of an organization. In a dynamic business scenario, manpower planning is critical to organizational growth and stability. It involves developing skills and competencies of existing employees to meet ever changing labor market demands. Having a back up line of trained workforce in case of sudden requirement is also critical to the process.

Eli Lilly, for example, has a biannual action-learning program that brings together potential leaders, selected by line managers and the human resources department, to focus on a strategic business issue chosen by the CEO. Eighteen employees identified as having at least executive director potential, representing a mix of functions and regions, participate in a six-week session in which they meet with subject matter experts, best practice organizations, customers and thought leaders and they analyze what they've learned. In 2000, one such team was charged with developing an e-business strategy as a new avenue of growth- an issue that was a pressing concern at the time.

The group interviewed more than 150 people over five weeks and in the final week developed a set of recommendations to present to senior managers Ð'- who took their ideas quite seriously. Action learning programs such as Lily's serve a dual purpose: they provide developmental experiences for employees Ð'- who are forced to look beyond functional silos to solve major strategic problems and thus learn something of what it takes to be a general manager and they result in a useful work product for the company.

An organization set on the growth path needs competent people to achieve its objectives. And finding the right human resources is not an easy task. The strategists cannot plan out the actions without consulting the HR department. Today the HR works along with business line mangers to plan ahead of their manpower needs.

The best approach is to develop a backup plan which is involves grooming fresh talent and creating a second line at all functions. Identifying the skill matrix of the internal talent pool and putting to good use during business exigency optimizes the manpower utilization at any given point.

Better resource and manpower redeployment management would be one of the key to the success of future workforce planning. In the end, it is all about having the right people possessing the right skills in place at the right time. Succession Planning is the right tool for providing adequately trained and qualified personnel at all levels.

Succession planning assesses the likely turnover in key posts, identifies suitable candidates to fill these posts in future, and ensures that they have the right training and exposure for their future work.

What is Succession Planning?

Succession Planning is an integrated and systematic process of identification and development of star employees so that they can take over the key responsibilities and roles like the CEO of the company in the future or as per the requirement. But the plan should be realistic and flexible and in alignment with the long term objectives and policies of the company. The process not only provides you with a pool of competent employees it also acts as a tool for retainment of competent employees.

It is the smooth and gradual process of transfer and delegation of responsibilities and power from top level to other levels so that they can assume the responsibilities as and when the need arises.

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