Planning and Management

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Directions: How can the need for a systematic SP&M program be demonstrated in

an organization? Use the questions below to help you organize your thinking. Answer

each question in the space appearing below it. Then compare your responses

to those of others in the organization. Add paper if necessary.

1. What crises, if any, have occurred in placing high-potential individuals or filling

key positions in recent years? Describe the situations and how the organization

coped with them. Then describe what happened (the outcomes of those strategies).

Make a list of the crises, if any, and briefly describe:

2. What opportunities, if any, have you noticed that may affect the knowledge,

skills, and abilities that will be needed by workers in the organization in the

future? (In particular, list strategic changes and then draw conclusions about

their implications for knowledge, skills, and abilities.)

Make a list of Describe how those strategic changes are likely to afstrategic

changes: fect the knowledge, skills, and abilities needed by

workers in the organization in the future:

What variables are really important to the organization?

What results can be influenced by action?

Meaningful, quantifiable results can be obtained only by focusing attention

directly on answering these questions. Decision-makers must be asked what

they believe to be the most important variables and actions that can be taken

by the organization. This information, then, becomes the basis for establishing

the financial benefits of an SP&M program.

When measuring SP&M results, decision-makers may choose to focus on

such issues as these:

How long does it take to fill key positions? (Measure the average elapsed

days per position vacancy.)

What percentage of key positions are actually filled from within? (Divide

the number of key positions filled from within by the total number of

key positions.)

What percentage of key positions are capable of being filled from

within? (Divide the number of high-potential workers available by the

number of expected key position vacancies annually.)

What is the percentage of successful replacements out of all replacements?

(Divide the number of retained replacements in key positions

by all replacements made to key positions.)

Of course, issues of importance to top managers, and appropriate measures

of bottom-line results, will vary across organizations. The point is that these

issues must be identified before appropriate criteria and bottom-line measures

can be assigned. Indeed, the best ways to measure SP&M results come from

the goals and objectives established for the SP&M program.

Another way to view the bottom-line measure of a SP&M program is to

compare the expenses of operating the program to the benefits accruing from

it. That may be difficult, but it is not impossible to do. As a first step, identify

direct and indirect program expenses. Direct expenses result solely from operating

an SP&M program. An example might be the salary of a full- or parttime

SP&M coordinator. Indirect expenses result only partially from program

operations. They may include partial salary expenses for managers involved in

developing future leaders or the cost of materials to develop high potentials.

As a second step, identify direct and indirect program benefits. (This can

be tricky, but the key to success is involving decision-makers so that they accept

and have ownership in the program benefits that are claimed.) Direct

benefits are quantifiable and financially oriented. They might include savings

in the fees of search firms. Indirect benefits might include the goodwill of

having immediate successors prepared to step in, temporarily or permanently,

whenever vacancies occur in key positions.

As a third step, compare the costs and benefits. Will the organization gain

financially if a systematic approach to SP&M is adopted? In what ways? How

can the relative effectiveness of the program be related directly to the organization’s

pressing business issues and core mission?

For additional information on cost-benefit analysis, review the numerous

approaches that have been suggested for evaluating the bottom-line value of

training programs.3 Use those approaches to clarify costs and benefits of a

systematic SP&M program.

Of course, other ways—apart from hitchhiking on crises, seizing opportunities,

and showing the cost-benefit ratio for program operations—might be

used to demonstrate the need for a systematic approach to SP&M. Consider:

How has the need been successfully demonstrated for other new programs in

the organization? Can similar approaches be used to demonstrate a need for a

systematic SP&M program?