Fundamentals of Human Resource Management 6th Edition by Raymond Noe, John Hollenbeck, Barry Gerhart,Patrick Wright

Exercise 5

Few Companies Are Prepared for Future Talent Needs
Compared with organizations that lag behind them, high-performance organizations prioritize succession planning and leadership development, according to the Institute for Corporate Productivity (i4cp). A survey by i4cp ranked companies in terms of scores based on their market share, revenue growth, profitability, and customer satisfaction. The survey found that the top-ranked companies outperformed the low performers most dramatically when it came to preparing for their future talent needs.
However, behind that information is shocking news: less than one-third of respondents say their company is prepared for the future. Even among the top companies, only 27% say they have employees prepared for openings in the executive ranks, and only 18% are ready to fill management positions at lower levels. About one-third (34%) say their organization develops leaders effectively.
If these are the best companies, imagine the room for improvement at the low performers. And imagine the competitive advantage a skilled HR manager could deliver at an organization committed to improving its talent management. For example, i4cp has identified two activities strongly associated with high performance but rarely used: (1) identifying future leaders based on their influence rather than their job title, and (2) taking a strategic approach to workforce planning, tailoring development programs to the competencies forecast to be needed in the future.
What elements of a high performance work system (see Figure 9.1) would succession planning and employee development contribute to