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

Exercise 22

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 outcomes of a high performance work system (see Figure 9.2) would succession planning and employee development contribute to