Is your workforce getting older? If you are like most manufacturers, your workforce is aging. In many situations, you may have critical positions and skillsets at risk from competitive poaching, retirement, illness or worse. The problem is common, yet most companies are not dealing with the issue proactively. Instead, they wait until a key employee’s departure is inevitable or has already occurred.
Most high-performing manufacturers consider themselves to be proactive, rather than reactive. However, as it pertains to aging workforce issues, the vast majority of companies are reactive. Unfortunately, not planning appropriately can lead to significant issues. These include: loss of customers and relationships, loss of capabilities, degraded service levels, increased organizational risk and reduced financial performance.
There are two primary processes that ALL manufacturers should undertake to ensure the future success of their companies. First, succession planning should be conducted, formally, on a three-to-five-year cycle. Second, knowledge capture and transfer processes should be conducted for all key positions.
Succession planning for key leadership and technical positions is critical. Most companies think succession planning is simply identifying successors for key roles. This is important, but it’s only a fraction of the process. Technology-oriented younger workers need to be prepared for their future roles. Many of these younger workers will not be ready to assume key leadership or technical roles without additional education or training.
We suggest profiling key positions to be filled. These profiles include a list of all responsibilities, tasks and associated competency levels, soft skills, effective behaviors and required credentials. Once the profiles are completed, assess future successors relative to these profiles. Gaps in capabilities, skills and assets will become apparent. Once gaps are identified, a development plan can be created to ensure the successor will be ready when his/her time comes to take the new role.
The importance of development plans cannot be understated. Especially as it pertains to the President/CEO succession in family-owned businesses. In fact, 60% of second generation leaders fail. Nearly 90% of third generation leaders fail. These unacceptably high failure rates are primarily due to successors not being prepared to lead their organizations.
As part of successor development plans, we need to transfer information from older workers to the younger workers. In our technology-centric world, we often think about upskilling older workers to ensure they are leveraging newer technologies. Unfortunately, we often forget to capture and transfer the knowledge and capabilities they have gained over many years. We recommend identifying personnel in critical positions, or with critical skillsets, that are 55 or older. Once identified, conduct detailed knowledge capture interviews that address: key skills, critical decisions, technological history, past behaviors, and institutional information such as customer information, technology sources and supplies, historical successes and failures, etc.
Once interviews are completed, document the interview notes. We suggest creating notes, case studies and videos. Historically, videos have been the most effective method to transfer critical information. The information captured can then be added to development plans as needed.
As you move forward, follow these sequential steps:
- Identify the key positions that need clearly identified successors, as well as knowledge capture activities
- Conduct knowledge capture interviews
- Create profiles for key positions
- Identify successors and assess for gaps
- Create development plans to close all gaps
- Implement development plans
If your workforce is aging, it’s never too soon to start the planning process.
We recommend you start now!
For a deeper dive into the topic of succession planning (SP), check out this great podcast featuring EDSI’s Managing Partner, Jim Bitterle. You’ll learn:
- Why SP is important
- Do’s and Don’ts of SP
- How to coordinate and launch a step-by-step plan
- How SP helps build a talent pipeline to "Hire for the Future"
Download Our Free Succession Planning Templates
Are you looking for a way to find the right person to take over a position? Fill your talent pipeline? Ensure that valuable knowledge is transferred before it's lost? Or, did someone say the word, "retirement?" Our easy-to-use templates can get you started.Download Templates