HUMAN RESOURCE

MANAGEMENT
Project on-

T.Y.Bms
V
Semester
 Succession Planning

Professor in charge
Prof. Arshi Siddiqui

Compiled by:-
Kinjal Kareliya (11)
Neha Mhatre (20)
Sanya Tole
(32)
Afreen Virani
(34)
Shafqat Shaikh
(50)

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 Succession Planning

We would like to give our sincere Thanks to

Prof. Arshi Siddiqui for assigning such a
valuable and wonderful project, and giving us
an opportunity to explore a full-fledged
industry to carry out our analytical study for
this project.

ACKNOWLEDGEMEN
This project will help us to curve our

T manner, which is
personality in the best
needed for professional career as well as for
our personal life & in fact this project is the
mirror of our aspiration. It is only through this
project we came across the essence of the
subject.

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 Succession Planning

INDEX
Sr. No Topic Page
No
1. What is Succession planning? 5

2. Why is Succession Planning Important? 6

3. Ways to Implement 7

4. Key Factors to be considered 15

5. Models of Succession Planning 17

6. Succession Planning Tools 19

7. ADVANTAGES 20

8. DISADVANTAGES 22

9. WHY SUCCESSION PLAN FAILS? 24

10. Case study- Ranbaxy 25

11. Suggestions 27

12. Conclusion 28

13. Bibliography 29

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 Succession Planning

What is Succession planning?

Succession planning is a process of determining critical roles within
the company, identifying and assessing possible successors, and
providing them with the appropriate skills and experience for
present and future opportunities.

It involves having senior executives periodically review their top

executives and those in the next lower level to determine several
backups for each senior position. This is important because it often
takes years of grooming to develop effective senior managers.
There is a critical shortage in companies of middle and top leaders
for the next five years. Organizations will need to create pools of
candidates with high leadership potential.

A careful and considered plan of action ensures the least possible

disruption to the person’s responsibilities and therefore the
organization’s effectiveness. A succession plan clearly sets out the
factors to be taken into account and the process to be followed in
relation to retaining or replacing the person.

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 Succession Planning

Why is Succession Planning

Important?
1.ASSESSING FUTURE NEEDS
Having this process in place is vital to the success of the
organization because the individuals identified in the plan will
eventually be responsible for ensuring the company is able to
tackle future challenges.
Examples include such a person who is
 Suddenly and unexpectedly unable or unwilling to continue
their role within the organization;
 Accepting an approach from another organization or external
opportunity which will terminate or lessen their value to the
current organization;
 Indicating the conclusion of a contract or time-limited project;
 Moving to another position and different set of responsibilities
within the organization.

2.INDIVIDUAL DEVELOPMENT NEEDS

The 'high potential' candidates must be carefully selected and
then provided training and development that gives them skills
and competencies needed for tomorrow's business environment.
These high potentials will one day become the leaders of the
Company. This is why their development needs to incorporate a
broad range of learning opportunities in your organization. The

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individuals should also be exposed to as much of the working

environment as possible so that they gain a good understanding
of what the company requires to remain successful.

3. COMPETITION
Organizations that understand the need to manage the
development of their high performers are a step ahead of their
competitors! The effort required to establish a development
program for future leaders is worthwhile because it creates a
motivated and capable group of employees that are ready to
move forward in the organization when the need arises.

4.AN AID TO PLANNING PROCESS

A succession plan clearly sets out the factors to be taken into
account and the process to be followed in relation to retaining or
replacing the person. Succession management systems provide
an enabling solution for the planning and process – going through
all possible scenarios and providing the best solutions and
shortest paths to succession. Having a decision making body and
succession planning process is critical. However, software can
help make this process consistent, automated and fair.
Succession planning teams can play “what if” scenarios to ensure
that they are thinking of all possibilities. They can search for
talent throughout the organization – in different organizations and
countries. They can also ensure a continual and full pipeline of
talent.

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Succession Planning

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 Succession Planning

Ways to Implement
1.REVIEWING TALENT
One of the challenges in all organizations is planning for HR
needs. It is essential to adopt a disciplined approach to match HR
resources with the anticipated needs of an organization. This
includes aligning the succession planning process with business
strategy. “The purpose of the talent review is to figure out the
talent required to implement the business strategy and constantly
strengthen the talent pool. The talent review and planning process
helps us identify talent for emerging roles in the organization,”
says Bijay Sahoo, vice-president (talent engagement and
development) and head of HR, Wipro Technologies. Commitment
from the top management is another key factor for ensuring the
success of succession planning. Sahoo reveals that in Wipro, the
chairman (Azim Premji) and vice-chairman and CEO (Vivek Paul)
give enormous importance and their personal time for talent
review and planning, and personally supervise the development
and implementation of the talent plan for key roles.
According to Sahoo, the other essential factors are:
(a) Accountability, as the succession planning program requires
ownership at all levels in the organization. Each manager should
be responsible for assessing and developing the talent in his or
her team.
(b) Constant attention, as it can be tempting to overlook the need
for succession planning in the face of more immediate needs.

2.PLANNING THE PROCESS

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 Succession Planning

The bench strength of current and future leaders gives a

competitive edge to every Organization. At Wipro, the succession
planning programme is called Talent Review and Planning (TRP),
and it is the most critical part of the organization’s leadership
building and talent management process. “Once our business
strategy for the year is finalized, we identify the critical roles to
execute it. We review the talent available for those roles
internally as well as externally. We plan for the succession of
existing critical roles, including that of the CEO, and identify
employees who are ready to take over the roles immediately and
over the next 1-2 or 2-3 years,” informs

Sahoo. He adds that the company does developmental planning

for each identified internal candidate in terms of job rotation,
training, coaching and performance counseling. They also keep
track of potential external candidates, and establish touch points
for attracting them at the appropriate time.
The respective SBU heads and the SBU HR heads do the TRP for
the top three levels of their business. This contributes to the TRP
at the Wipro Technologies level, where the chairman and vice-
chairman, along with the HR head, get involved in talent planning
for the top three levels. Next is the implementation of the talent
strategies by developing and reviewing the action plan.
Infinite Computer Solutions (ICS), which has a global headcount
of 1,800, employees have also taken up higher roles without a
change in designation, with support from functional heads and
senior management teams. A skill-gap analysis is done of the
candidates, and requisite training provided to make them able
successors.

3.CLEAR FOCUS

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 Succession Planning

It is a known fact that while most managements are interested

in developing a pool of successors for key positions, they find it a
difficult task to ensure the success of their efforts. Succession
planning can get very complicated. Organizations must therefore
have a clear focus.
Wipro has quarterly talent engagement and development (TED)
reviews, and action points of each SBU and vertical are tracked.
“We also track the number of senior positions that are filled
internally, which gives an indication of the success of the
programme. At the macro level, the retention figure also reflects
the effectiveness of the succession planning programme, since
one of the objectives of the programme is to help employees
realize their career aspirations and thus retain them in the
organisation. Systematic succession planning does generate
leadership talent, and an organisation can measure its
effectiveness by looking at the leadership talent it has created
and provided to the industry.

PERFORMANCE/POTENTIAL GRID

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 Succession Planning

4.THE TRAINING DIFFERENCE

Training plays a key role in succession planning. It is imperative to

strategize, design and implement programmes to train future
leaders.
Wipro has its lifecycle leadership development programmes, which
are synchronized with the roles employees play at different stages
of their corporate life. These include the New Leaders Programme,
Wipro Leaders Programme, Business Leaders Programme and
Strategic Leaders Programme for different leadership positions that
an employee will assume in the organisation.
“Most organizations do skill-gap analysis of the selected candidates.
A schedule is drawn for the prospective individual to acquire the
knowledge, skills and competencies within a time-frame,” says
Sunder Rajan, general manager, HR & administration, ICS. He adds
that the training could be through internal programmes or on-the-

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job (local as well as global) to gain cross-functional or cross-

geographical exposure for better maturity of the expertise that
would enhance the confidence level of the person.

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 Succession Planning

5.JUST-IN-TIME SUCCESSION
Then there’s just-in-time succession, which maps existing
competencies of the staff to fill an important position. Succession
planning software uses competency analysis which lets
companies understand the demand side of the equation with
what their staff has to offer. “Succession planning is not an issue
of a position; you can plan for two or three years, but by that
time the to-be-successor may have already left the organisation;
consequently it is not relevant. Instead of looking at a job to fill,
organizations should profile it in terms of competencies, go to
the data bank, and find whose competency profile matches the
job,” advises Stephen Martin, president of ITAP Europe. The key
to this is competency development across the organisation; ITAP
has done succession planning for many global organizations
through competency development.

In other words succession planning comprises of these

important steps -
 Recruitment and staffing - you recruit superior and right
employees
 Training and development - you
train the employees to develop
their knowledge, skills and
abilities
 Performance and Compensation
management - prepare them for
advancement or promotion into
ever more challenging roles

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 Succession Planning

 Other (in which talent management plays a role) - you are

prepared to retain or replace superior employees

Typical activities covered by succession planning include -

 Determine what roles and skills are critical for the growth of
the company
 analyze and address the gaps revealed by the planning
process
 identify and understand the developmental needs of
employees to fill those positions
 ensure that all key employees understand their career paths
and the roles they are being developed to fill
 train people for skills and positions that are not presently
existing in the company
 understand the time needed to backfill key roles
 enrich succession plans through regular executive discussion
of people and posts
 identify top performers in all departments and make sure that
they are engaged and satisfied to stay with you for a long
period
 continually review and check the process of succession and
whether planned individual development has taken place
Succession planning is a process by which successors are identified
for key positions throughout an organization including vital roles in
each department of the organization. It should take into account the
strategic vision and objectives of the organization. With good
succession planning in place, employees are ready for new
leadership roles so when someone leaves the company, another is
skilled and ready to step-up to that position. Succession planning
can also help develop a diverse workforce, by enabling senior

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management to look at the future goals of the organization as a

whole.

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 Succession Planning

A Sample Succession chart

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 Succession Planning

Key Factors to be considered

The key factors HR professionals should consider while
developing a succession plan are –
 Strategic plans and future goals
 Workforce requirement
 Knowledge retention and critical roles
 Talent management strategies
 Models of Succession Planning
 There are three main models that companies use to implement
succession planning:
 Short-term planning or emergency replacements
 Long-term planning or managing talent
 Combination of above plans
 Organizations should take a close look at their goals and levels
of commitment
 Short-term or emergency replacements

For any succession plan to be effective, it should have

these salient features:-
• The succession planning program must have the support and
backing of the company's senior level management
• Succession planning must be part of an integrated HR process
that includes training, development and performance appraisal
• Succession planning must be part of an integrated HR process
that includes training, development and performance appraisal
• Identify what skills the organization will need in 5, 10 or 15
years

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 Succession Planning

• Critical positions must be identified and included in the

Company's succession planning program
• Identify high-performers that are almost ready to step into
those critical positions
• Analyze the workforce and identify who will be eligible for
retirement within the next five years
• Managers need to identify the responsibilities, skills and
competencies that will be needed by their replacements
• A system for communicating succession planning information
to managers must be established
• A systematic approach for identifying, nominating and
selecting potential successors must be established
• Background information on potential successors, such as
education, experience, skills, appraisals and potential should
be reviewed
• The training and development requirements of potential successors
needs to be determined
• The skills of potential successors must be developed through work
experiences, job rotation, projects and other challenging assignments
• A system for monitoring candidate’s development plan progress by senior
management should be established
• Succession planning must include a system for providing feedback and
encouragement to potential successors
• Succession planning is basically a ‘numbers game’ that requires good
organizational skills and the ability to pay attention to details
• Finally, the succession plan must belong ‘to the organization’ and not to
the HR department in order to make sure it has the attention it deserves

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 Succession Planning

Models of Succession
Planning
There are three main models that companies use to
implement succession planning:

1. Short-term or emergency replacements

This is the most common model of succession planning and
serves as a crucial point for all types of businesses. Short-term
replacement planning is focused on an urgent need caused by a
sudden development within the organization –skilled employee
leaving the company, expansion or contraction of business.
Sometimes, emergency replacement planning must work to
retain knowledge that is about to be lost. Emergency knowledge
retention is an option to consider if the organization is about to
lose specialized knowledge and does not have a successor to
take the knowledge. Emergency succession planning can come
into play any time the organization expands in a new direction or
discovers the talent gaps to fill the required managerial position.
Generally, human resources will try to fill the role from within the
organization, but often go outside, if no one has been trained for
the job in the organization.

Long-term planning or managing talent

Talent management focuses on the future needs of the
organization. Working within the strategic framework for the
company’s future goals, senior management identifies the
positions necessary for growth and the best candidates to fill

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 Succession Planning

those roles. Some organizations invite all employees to take part

in an assessment process, while others have managers identify
leadership candidates. If companies wish to grow leaders from
within their existing talent pool and have the time and resources
to develop a useful program, effective talent management will
become a key component of its long-term human capital
strategy.

Advantages
• Identifies a specialized
talent pool
• Defines and builds future
skills required for the
success of the organization
• Motivates and retains
employees by involvement
in their career growth
Disadvantages
• Expensive and time consuming
• Existing employee-base may not
have required skills and experience
for key posts and outside hiring
can lead to resentment
• Managers may be frustrated by not
being allowed to choose a
successor

2. Combination of both the plans

This model allows senior management to plan for the long-term
growth of both the organization and employees within the
organization and prepare for emergency replacements to ensure
that business is not affected by knowledge loss or lack of skilled
employees.

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Succession Planning Tools

Succession planning starts when you can accurately measure the
performance of the employees assess skills and career growth
information. Succession planning tools need to have extensive
integration and customization options to support all of your talent
management efforts.
To identify a correct succession planning and talent management
system you need to have a software that -
o Has a performance management system that delivers accurate
data
o Self-service online resumes for employees
o Has a recruiting system that enables to transfer information on
new hires directly to your succession planning analysis and data
o Integrates with your HRIS position/job management data with
links to competencies and other qualifications
o Is a powerful bench strength assessment tool that can share,
review and analyze data to provide latest and updated
information
o Uses easy interactive tools or matrices for assessing employee
potential, flight risk and impact of loss
o Provides the needed framework for effective gap analysis
o Has a search capability based on multiple filters and employee
characteristics
o Provides a view of your succession plan in any format,
including organizational charts with concern areas highlighted
o Provides with a complete career inventory data for each
employee readily at hand, managers can specify targeted future
jobs for colleagues and indicate a readiness timeframe
o Customizable email reminders

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 Succession Planning

o Informative visual reports and dashboard

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 Succession Planning

ADVANTAGES
Succession planning helps you take a more strategic approach to
leadership development, employee skill assessment and perhaps
even more important as baby boomers retire – preserving critical
organizational knowledge. With incumbents ready to go any time an
expected or unexpected change occurs in your organization, you
can ensure business continuity at all levels of the organization. the
main advantage of succession planning in an organization is the
active development of a strong ‘talent resource’ for the future which
is vital to attract and retain the best and key people which will help
in present and more for the future growth of the organization.
The key is to match the needs of the organization to the goals of the
individual. Keeping talented people in place by providing them with
opportunities they may not receive elsewhere will create a stronger
and more loyal group of future managers and executives thus
saving the company’s recruiting and hiring costs over the long-term

Organizations use succession planning to achieve a number

of objectives like:
 Improve recruitment process for key positions
 Active development of longer-term prospective successors by
ensuring their career growth and analyzing work,
responsibilities, skills and knowledge required for the future
 Audit the ‘talent pool’ of the organization and that helps in
allocation of responsibilities and development strategies and
fill the identified talent gaps

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 Build a ‘key talent resource’ of employees who share key skills,

knowledge, experiences and values seen as important to the
future of the organization
 It helps having the right people with right skills in the right jobs
doing the right things. If they people are doing wrong things
then you are right back where you started.

It provides
 An ongoing supply of well trained, broadly experienced, well-
motivated people who are ready and able to step into key
positions as needed.
 A cadre of desirable candidates who are being integrated into
the company with positive goals established for them
individually.
 A flow of these capable people through various departments
with the goals of educating them into the culture and
processes of the company.
 Alignment of the future needs of the company with the
availability of appropriate resources within the company.
 Positive goals for key personnel, which will help keep them
with the company and will help assure the continuing supply of
capable successors for each of the important positions
included in the succession plan.
 Defined career paths, which will help the company recruit and
retain better people.
 Very likely, the continuous input of ideas to improve the
internal processes and procedures of the company, as well as
the opportunities to improve the offerings and services of the
company in the marketplace.

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DISADVANTAGES
Succession planning suffers from pitfalls like:-
• Focusing only on the 'technical competencies' and failing to
consider the team-building and leadership development
requirements
• Underestimating people within the organization or overlooking
employees that don't appear to fit your standard 'company
template'
• Implementing a program that is designed for upward mobility
only - lateral succession moves should also be included in the
plan
• Failing to offer the appropriate training and developmental
opportunities
• Creating a development program that only offers generic
'leadership' training programs
• And the two biggest errors made regarding succession
planning efforts:
Not holding managers & leaders accountable for succession
planning
• Not sharing the data with employees - you run the risk of
losing promising employees if they don't feel the company has
a plan for their development
• Lack of a formal written plan for each key person or position.
• A rigid, inflexible plan NOT tailored to the needs and abilities of
the personnel involved.
• Too long a wait for real movement/promotion, potentially
resulting in the best people leaving due to apparent inertia in
the system.

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• Too superficial an approach, with the corresponding lack of real

understanding of the procedures, processes and requirements
of each area the individual is exposed to during the process.
• Selection of unqualified or unmotivated people for inclusion in
the succession plan. Quality of the individuals selected is
paramount to the success of the process.
• The succession planning process needs to be considered as
part of the company's strategic planning process because it
deals with projecting future changes by anticipating
management vacancies and then determining how to meet
these challenges.

This is why succession planning must be a coordinated effort

between HR and line and senior executives must ensure the
line managers get involved with their own division succession
planning efforts.

Finally, don't make the mistake of thinking succession planning

is only concerned with 'upward' succession. Lateral
assignments may also be used because there are fewer
opportunities as you progress upward in the organization.

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WHY SUCCESSION PLAN

FAILS?
 Lack of a formal written plan for the person or position(s).

 A rigid, inflexible plan NOT tailored to the needs and abilities of

the personnel involved.

 Complex program, requiring considerable paper work, follow-up,

reporting.

 Lack of availability of human and financial resources; lack of

budgetary commitment.

 Lack of understanding how it works and how it benefits the

organization.

 Individuals, other than the Champion, do not support the

program.

 Superficial approach; lack of real understanding of the

procedures, processes and requirements of each area the
individual is exposed to during the process.

 Too long a wait for real movement/promotion, disillusionment,

may result in some people leaving due to apparent inertia in the
system.

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 Selection of unqualified or unmotivated people for inclusion in the

Succession Plan. Quality of the individuals selected is paramount
to the success of the process.

 The requirements of the Managers/ Executives are not fulfilled in

providing dedicated instructions, guidance regarding skills,
knowledge and abilities needed for the candidates to be
successful.

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Case study- Ranbaxy

 In 1952, an entrepreneur Bhai Mohan Singh founded Ranbaxy
as a manufacturer of pharmaceuticals in Mohali in Haryana.
Like most other small pharmaceutical companies, Ranbaxy too
was mainly engaged in producing drugs by reverse
engineering the molecules of established drug brands
.
 In 1967, Dr Parvinder Singh (Dr Singh), Bhai Mohan Singh's
son, joined the company after completing his doctorate in
pharmacy at the University of Michigan (USA). Dr Singh was a
very ambitious person and worked hard to take the company
to greater heights. In 1982, he became the company's
Managing Director .
 Brar had joined Ranbaxy in 1977 as a business development
manager. A thorough professional and hard worker, he soon
rose through the company's ranks to become one of Dr Singh's
most important and trusted men
 In 1993, Brar became the President and a whole time Director.
From the very beginning of his career at Ranbaxy, Brar was a
close confidant of Dr Singh.
 Company watchers felt that it was 'Parvinder's vision and
Brar's execution which helped Ranbaxy turn into a group with
many manufacturing facilities outside India with more than
2,000 overseas employees
 In the early 1990s, differences cropped up between Dr Singh
and Bhai Mohan Singh over the growth route the former was
charting for the company. Dr Singh wanted to take the risk of
investing huge amounts into basic R&D and in expanding
operations to other countries.

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 Brar supported Dr Singh's vision of internationalizing the

company by setting up operations in various countries like
China, US, Ireland, and others in Europe. In the late 1990s, Brar
chalked out a strategy to shift half the company's business to
the US, a decision which was staunchly opposed by members
of the Singh family

Brar as Ranbaxy CEO and MD.

 When Brar took over as Ranbaxy's MD & CEO, the company did
not have any family representation on the board. It was truly a
company managed by professionals. However, by the
beginning of the 2000s, the Singh family reportedly decided to
take control of the firm.
 Reportedly, he had revealed his retirement plans in 1997 itself.
Brar had said that he would retire in 2002, after completing 25
years with Ranbaxy
 Tempest takes over. Tempest is expected to continue till
Malvinder Singh is groomed to done the mantle
 Under the leadership of Tempest, Ranbaxy planned to focus on
HR planning

About the case

 The case discusses the CEO succession planning controversy

at Ranbaxy Laboratories Limited (Ranbaxy), India's largest
pharmaceutical company.
 The case describes how and why Parvinder Singh (Ranbaxy's
promoter, also CEO) believed in running the business
professionally and handed over the company's management to
D S Brar (Brar), a professional (and a non-family member),

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 Succession Planning

amidst stiff opposition from family members. The case then

details how Brar transformed Ranbaxy from a small Indian
pharmaceutical company into a research based global
pharmaceutical major

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Suggestions
Market pressure is increasing day by day and in order to face
the market pressure the succession planning should be done in such
a way that different players of top management can handle
different roles or one man should be able to do all work and handle
all roles.
“The man for all seasons”
The top management is the one who heads all the
departments and prepares rules regulations and does planning for
the organization. Thus this top management should not be in
pressure so that the other employee who is being promoted to top
management should feel comfortable at his place as the new person
will not be able to handle the pressure at the beginning.
Every organization requires special talent for its top
management so the organization should fulfill all the needs and
requirements of the deserving and talented people whom they feel
can be recruited to the top management. This will ultimately help in
talent retention.
We suggest that every organization should follow succession
planning so that the top management of the organization is with
talented people and also during emergency they have a proper
substitute for the same.

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Conclusion
By the end of our project we come over to a conclusion related
to succession planning that most of the companies still feel that
their growth was limited because they did not have the right talent
and many companies lack the right leadership talent.

Most companies and executives do not have confidence on

their top level executives as it is agreed to the fact by the
employees that company leadership is key contributor to job
satisfaction, commitment and interest to stay. Most employees
always value leadership qualities of honesty and integrity.

It has been seen that only 1% of companies only rate their

succession planning as excellent and rest as fair or worse.

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Bibliography

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