0 | P a g e MSc Business Studies
Leading and Managing People Master’s Thesis
Due date: 18 October 2013
Exploratory Case Study: How is succession planning conducted in
a large Oil and Gas multinational organisation?
Student: Nevena Nacheva Student number: 10426051
1 | P a g e TABLE OF CONTENTS
ABSTRACT ... 2
PREFACE ... 3
INTRODUCTION ... 4
CHAPTER 1: LITERATURE REVIEW ... 6
1.1GLOBAL TALENT MANAGEMENT ... 9
1.2TO WHOM DOES THE TERM ‘TALENT’ REFER TO?... 9
1.3SUCCESSION PLANNING ... 11
1.3.1 Replacement planning ……….……….…………..12
1.4 Research Question……….13
CHAPTER 2:METHODS ... 14
2.1 Background to the company and internship project ... 14
2.2 Qualitative studies ……….….15
2.3 Case study method and limitations ……….16
2.4 Data collection and participants ………...17
2.4.1 Semi-structured interviews ………..18
2.5 Data Analysis ……….……….19
CHAPTER 3: RESULTS ... 21
3.1THE COMPANY ... 21
3.2 TALENT IDENTIFICATION OR WHO IS LABELLED AS ‘TALENT’ AND WHY IS IT IMPORTANT ... 22
3.3 SOFT SUCCESSION PLANNING ... 25
3.4 The implications linked to the misleading use of the term Soft Succession Planning ... 28
3.5 A misleading interpretation of the term Soft Succession Planning ... 29
CHAPTER 4: DISCUSSION ... 32
4.1 Limitations and recommendations for future research……….……….34
Chapter 5: Conclusion ... 36
References ... 39
Appendix I ……….……….……….45
Appendix II ………..………46
2 | P a g e Abstract
It has been established that talent management and its processes are of great importance to an organisation’s competitive advantage. However, even though the topic has
received a vast amount of interest, no consensus has been reached as to how exactly multinational organisations manage their ‘talent’ in order to achieve organisational success. This case study has been created with the intent to shed some light on the topic of succession planning in multinational organisations. The research has been conducted in The Company, a multinational organisation which operates in the Oil and Gas industry, dedicated to innovation and excellence. After a brief research, it was established that the Global Skill Pool Managers of the Talent and Development department are responsible for the process labelled as Soft Succession Planning for the technical employees within The Company. Through reviewing various policy documents, job descriptions and conducting face-to-face interviews, the author was able to establish a misinterpretation of the term succession planning and discover that the term has been used for a process similar to replacement planning. Based on the findings of this case study, The Company has adopted the author’s recommendations (made confidentially) during the project and is the process of reviewing and reforming their technical resourcing policies and procedures for high grade and senior management roles.
3 | P a g e Preface
The topic of this master thesis research has been consciously chosen by me and of great significance to my career aspirations. I have been fascinated with how companies manage their employees and have had the opportunity to experience it first-hand. Furthermore, I was involved in an internship opportunity in a truly multinational company where the technical human resources are scarce and the strive for excellence and efficiency is extremely high. This encouraged me to take the opportunity to explore not only a topic that has been of great interest to me, but also to try and be a catalyst for a positive change towards the organisational goals and aspirations.
I would like to take the opportunity to thank my supervisor Dr. Anne Keegan, for all the support and for believing in me even when I didn’t. Further, I would like to thank my supervisor in The Company and all who agreed to be part of this research.
Thank you all!
Nevena Nacheva
4 | P a g e INTRODUCTION
In order to explore the topic of talent management and soft succession planning, this case study looks at one of the major multinational organisations in the Oil and Gas industry. The Company is known the world over, for its innovative approach to drilling technologies, among others, and the commitment to achieving operational excellence while valuing safety as first priority. The organisation is also known for its rigorous hiring processes and the constant search for the brightest minds out there.
The author was employed by The Company for four months, during which all the information was gathered and compiled. The author was part of was the Project and Technology Business’ Talent and Development department based in The Netherlands. This
department focuses on the technical staff within the company, such as electrical engineers, drilling specialists, research and development personnel and exploration specialists. Due to the fact that The Company is operating in the Oil and Gas industry, the technical staff is regarded as the backbone of the organisation. The author was involved in an internal project responsible for the review of the roles and responsibilities of the Global Skill Pool Managers.
After reviewing the project, the author quickly identified that a process, named soft succession planning, is regarded as a key responsibility of the Global Skill Pool Managers. Given the current global lack of technical staff, the author acknowledged that it would be highly beneficial for The Company to focus this research on talent management, in particular the topic of soft succession planning. By obtaining permission from the senior management of the department, the author was granted access to documents and information, which made this case study feasible. As a result of this research, the author presented her findings and made recommendations (Confidential) to the senior management of the department, which
5 | P a g e are currently being implemented to achieve a strategic change in the way succession planning for pools of technical resources is conducted.
6 | P a g e CHAPTER 1: LITERATURE REVIEW
The argument that an organisation needs to manage its human capital effectively and strategically has a long history and has been of great interest to strategic human resource management academics, practitioners and consultants. In recent years talent management practices’ have been considered to be a vital factor contributing to an organisation’s unique
and sustainable source of competitive advantage (Collings et al, 2009). Since the 1990s, when a group of McKinsey consultants established the phrase The War of Talent, the topic of talent management has become the ‘hottest issue among management academics’ (Collings et al, 2009, p.5). The work of these McKinsey consultants has been credited with articulating the challenges, which organisations were facing with the attraction and retention of strategically important employees (Michaels et al, 2001). Their ideas aligned with the increasing awareness from academics and practitioners that a firm’s human capital can provide the only true source of competitive advantage ( Caliguiri et al, 2005; Collings et al, 2009; McDonnell et al, 2010). Heinin and O’Neill (2004, p.67) add that ‘although many sources of competitive advantage provide short-lived gains, talent management can create the most enduring competitive advantage’.
An important question arises from the above-mentioned statement: Why? Why is talent management regarded as such an important contributor to competitive advantage and even more importantly who is regarded as a strategically important employee or a ‘talent’?
In order to find an answer for the above posed questions, a wider view of the field of human resource management is required. According to the resource based view (RBV) theory, a firm consists of a bundle of unique resources (Barney, 1991). Further, if those resources fall into the criteria of being valuable, rare, inimitable and non-substitutable (VRIN) they can create a source of sustained competitive advantage (Barney,1991). When
7 | P a g e the field of human resource management (HRM) in general is examined from a RBV prospective with a focus on a firm’s human resources, or workforce, the competitive advantage for organisations can hardly be disputed (Shanine et al, 2011). Morris et al (2005) confirm that a heterogeneous, global labour pool contains all four VRIN requirements: ‘a human being’s unique set of skills, knowledge, and experiences cannot be imitated or easily substituted, which makes a company’s workforce valuable and rare’ (Shanine et al, 2011,p.3). However, a firm’s human resources not only consist of the human capital, but also the HR processes and polices responsible for the creation of HRM within a firm. If the HR processes are looked through the RBV lens, the competitive advantage of HRM is essentially not present. This could be explained by the fact that global efficiency requires a standardised integration of best practices across different business units, hence Wright et al. (1994) argue that that makes it easier for competitors to imitate and adopt the same practices. It can be concluded that the truth is somewhere in the middle. A firm’s ability to create and combine
HRM practices and policies in a distinctive manner, which contribute to the development of unique human capital could be a source of a sustained competitive advantage (Shanine et al, 2011). Therefore it can be assumed that talent management, as a HR practice and the initial start point for the development of unique human capital or strategically important employees, is of vital importance to the firm’s sustained competitive advantage.
Furthermore, many scholars have attempted to unveil the meaning of talent (Mayers et al, 2013; Collings and Mellahi, 2009; Dai and Coleman, 2005; Ceci et al 2003), with no success in finding a consensus on the subject. However, it must be noted that the link between talent and intelligence has been examined quite frequently in a work environment context. Further, recent talent definitions have included various factors for superior performance, and intelligence is one of them. Mayers et al (2013) claim that high talent means high intelligence, and intelligence closely relates to high performance. Their
8 | P a g e assumption have been based on several meta-analyses (Schmidt and Hunter, 1998, 2000,2004) which found that intelligence is the most valid predictor of future job performance. Hence if intelligence is a factor in defining talent then the link between talent and high performance can account for the assumptions that talent management would be vital in sustaining high organisational performance or competitive advantage.
It has also been argued that talent management is of even greater importance to multinational organisations (Collings et al., 2009; McDonnell et al., 2010). Academics note that due to the more demanding skill set that multinational companies require, talent management is more complex in MNEs rather than cosmetically operating companies (Guithridge and Komm, 2008; Collings et al., 2009; McDonnell et al., 2010). When examining the literature in global talent management, the most commonly referred practice has been established to be succession planning (Lewis and Heckman, 2006; Groves, 2007; Rothwell, 2010). Although succession planning has been predominantly important and present in SMEs and family owned businesses, an increasing use of the HR practice has been observed in multinational organisations and can be considered as corporate-driven practice, which if formally implemented could be the difference between success and failure.
Although organisations have recognised the importance of managing their ‘talent’
strategically, the concept of talent management and succession planning remains under-developed and under-explored (Collings et al, 2009). Lewis and Heckman’s (2006) review of the available literature on the topic identifies a clear lack of understanding with regards to the scope, definition, processes or overall goals of talent management. In order to avoid ambiguity, talent management will be defined, along with the term ‘talent’ and succession planning.
9 | P a g e 1.1 Global talent management
The literature on the topic of global talent management is extensive; however there has been a lack of a clear definition regarding the concept. Most definitions suggest talent management is identifying, selecting and developing the right employees in order to ensure they utilize their potential while making a positive contribution to the organisational performance (Cappelli, 2008). Blass (2007) suggests that talent management denotes additional HR processes and opportunities which are available to the people within an organisation who are considered to be talent, while Creelman (2004) implies that talent management is best regarded as a mindset. Others (Heinin and O’Neill, 2004; Piansoongner
et al, 2008) identify talent management as integrated HR practices created to attract the right people at the right jobs at the right time. The recent work in the area of global talent management (Lewis and Heckman, 2006; Collings and Schulion, 2009; Collings et al, 2009; Mcdonnell et al, 2010) has helped reduce the ambiguity around the subject. For the purpose of answering the posed research question the definition of Collings et al (2009, p. 8) will be considered as the main definition of talent management: ‘The strategic international
integration of resourcing and developing key talent involving the proactive identification, development and deployment of high performing and high potential strategic employees on a global scale’. Hence it can be inferred that the aim of global talent management is to facilitate the success of the multinational organisations’ business operations by the strategic development and deployment of key employees in the context of business needs on a global scale (Collings et al, 2009).
1.2 To whom does the term ‘talent’ refer to?
A major issue related to the subject of talent management has been around what constitutes the term ‘talent’. In theory every employee has a positive contribution to the
10 | P a g e organisational success and needs development to reach his/her full potential. However, in the past organisations have been mainly concerned with the development and replacement of top executives; hence to whom the term ‘talent’ referred to (Heinen and O’Neill, 2004). In order
to answer the research question in this paper, the author has considered Lepak and Snell’s (1999; 2002) work on the HR architecture as a main contributing factor to the formulation of the theoretical background surrounding the definition of the term ‘talent’. Lepak and Snell (1999) propose four employment categories and a HR architecture surrounds each by examining the characteristics of human capital building on the resource based view and the human capital theory. The first quadrant (or the knowledge based employment) is regarded as the most relevant to the talent management subject (McDonnell et al., 2010). It refers to the core employees who add the most value to the organisational objectives hence those that McDonnell et al. (2010) consider to lay at the heart of talent management. Within this quadrant there can be different groups of employees who are referred to as ‘talent.’ The first group, which will be considered, refers to the specialist functional staff seen as key personnel or ‘talent’, who can be identified as critical to the organisational learning, core competences and goals (Heinen and O’Neill, 2004; McDonnell et al., 2010). This group could range from
client executives to research and development staff. The second group, on which this paper will focus, is the employees who are seen as the next generation of leaders or in other words the high-potential employees (Collings et al., 2009; Stahl et al., 2007; McDonnell et al., 2010). The argument posed here is that in every organisation there is a small group of exceptionally performing individuals who, in the future, are assumed to take a key position in determining to the success of the company. These individuals are considered to bring in high value-adding competencies.
11 | P a g e 1.3 Succession planning
Lepak and Snell (2002) argue that organisations are more likely to invest heavily in the training and development of employees who are members of the afore mentioned groups, however, talent management literature fails to achieve consensus on what is the best strategy when it comes down to managing talent (McDonnell et al., 2010). Furthermore, academics have argued that relatively few organisations manage their talent on a coordinated or effective basis (Collings et al., 2004; Cheese et al., 2008; Sparrow et al., 2004). When reviewing the literature on the subject, the most popular and used processes integrated in talent management include recruitment, selection, mentoring, career development, succession planning, talent gap review, recognition and rewards, leadership development and performance management. Of those practices, succession planning has been found to be the most common approach among multinational organisations when it comes down to talent management (McDonnell et al., 2010). According to Rothwell (1996) succession planning denotes the deliberate and systematic effort of an organisation to ensure the leadership continuity in key positions. Succession planning is most often a formal development programme aiming to develop managerial competence, which would lead to improved organisational performance (McDonnell et al., 2010). Thus, academics argue that organisations utilizing succession planning demonstrate a more strategic and effective approach towards the management of talent (Collings et al., 2009; McDonnell et al., 2010; Groves, 2005; Cheese et al., 2008).
While examining the literature on succession planning, an interesting topic called replacement planning arose and was considered to be of interest in this paper. It appeared that replacement planning has occasionally been considered as a substitute for succession planning, however, the process of replacement planning has a different aim than succession planning.
12 | P a g e 1.3.1 Replacement planning
Replacement planning is a process which has not received as much interest from academics as succession planning, however, it has been identified to be the starting point of succession planning (Rothwell, 2011). Rothwell (2011) defines the processes as ‘a process of identifying short-term or long-term backups so that organisations have people who can assume responsibility for critical positions during emergencies’ (p.87). The process has emerged because of the fact that time has become a strategic resource and taking this into account organisations cannot afford any delays in actions or decision-making. Short-term replacement planning refers to the identification of a backup for a critical position which would be vacant for a short period of time (i.e illness or vacation). Long-term replacement planning is considered when a critical position would be vacant for a long period of time (i.e sudden death, resignation or retirement). Rothwell ( 2011) explains that the replacements are not necessary people who will take over the job, but rather fill the position in until the business identifies a more suitable candidate. Furthermore, the identification of replacement personnel is usually conducted within the organisation and labelled as either ready to assume a critical position as replacement in the next six months or in the next six to twelve months.
Replacement planning differs from succession planning due to the fact that succession planning focuses on the potential of both the current employees and the business needs in a long-term perspective whereas replacement planning serves as a contingency in case of an unforeseen situation arises. On the other hand, similar to succession planning, the process of replacement planning involves the assessment of the employee’s potential to assume a critical position and the generation of an awareness of the talented people in the business. Although, replacement planning cannot substitute succession planning, it can be that the process can be a starting point for succession planning (Rothwell, 2011).
13 | P a g e 1.4 Research Question
Following from the exploratory review of human resource literature around talent management, the meaning of the term ‘talent’, succession planning and replacement
planning, the following research question will be investigated in the remainder of this case study:
‘How is succession planning conducted in a large Oil and Gas multinational organisation?’
The above research question will be investigated by exploring the answers to the following sub-questions:
1. Who is regarded as ‘talent’ in the company?
2. What are the processes deployed to cater to succession planning?
3. Is there an alignment between the academic postulation of succession planning and its practical implementation within the organisation?
The remainder of this paper is versed within the context of the investigation undertaken in The Company.
14 | P a g e CHAPTER 2: METHODOLOGY
The author chooses to use a qualitative approach in order to gain an in-depth understanding of the topic of succession planning in The Company. The research follows a single case study with data collected through semi-structured interviews. Further, additional data was collected through observations and documented data, which Yin (2009) argues, is common in case study research methodologies. The reason for the choice of data collection and analysis will be explained in-depth in the following sections of this chapter.
2.1 Background to the company and internship project
In order to gain a better understanding of the method and data gathered, it is important to note a brief background of The Company, what the role of the author was in The Company, and what was the exposure to the information acquired. The Company is a large multinational enterprise, which specialises in the Oil and Gas industry. Besides the strive for continuous innovation and improvement, The Company not only takes pride in its exceptionally skilled human capital but also the growth and development opportunities that it offers to each and every employee. Moreover, as stated in the internal HR mission statement, The Company’ focus is on placing the right people, in the right place, at the right time.
The project the author participated in, IOW, was created with the purpose to enhance the value created and added by the Global Skill Pool Managers to the organisational goals and the development of technical employees in the company. The author’s role was vital to the project as she was solely responsible for the process and outcome of the project. The author was granted access to a variety of documentation on the roles and contributions of the Global Skill Pool Managers and to the managers themselves, as well as to various other stakeholders. After an initial review of the data and engagements through conversations with a number of the Global Skill Pool Managers, the author identified a mismatch between what
15 | P a g e academics have argued and identified as succession planning and what the actual activity performed by the above-mentioned managers entails. This created a basis for further research into the topic not only from an academic point of view, but also from the organisational efficiency and effectiveness perspective. The author was able to stress the importance of this research to the senior management of the department and with their permission, was able to align the practical project in The Company with the academic question posed. Further details of why succession planning was regarded of great importance to The Company will be discussed in the results and discussion chapters of this paper.
The life cycle of the project involved four stages: (1) Gather documentation on the topic; (2) Gather qualitative information from the Global Skill Pool Managers and other stakeholders; (3) Based on the gathered information, create feasible and realistic long and short-term recommendations; (4) Implementation strategy. All of the above mentioned stages were completed in a timely manner and based on the author’s findings and recommendations,
especially in the area of succession planning; the department is currently in the process of restructuring and re-organising.
2.2 Qualitative study
The reason behind choosing a qualitative approach stems from its richness in data, the ability to achieve the research purpose of understanding the full range of factors behind the activity and its flexibility in exploring the issue from various perspectives (D’Abate, 2005). Strauss and Corbin (1990) identify that when there is lack of understanding of a topic, qualitative methods are the preferred methods due to their ability to discover the underlying nature and assumptions related to that topic. Moreover, Gephart & Rynes (2004) explain that qualitative studies examine a phenomenon in an atmosphere where it occurs naturally. Qualitative studies can provide rich and significant data in such a way that meanings from
16 | P a g e social actors can be recollected and retained to the exact context and actions. Gephart & Rynes (2004) continue to explain that an important value of the qualitative type of research is the understanding and description of the actual human interactions and meanings that account for the real-life organisational settings. Another advantage of qualitative research that was considered important for this case study was the fact that this type of research could be executed while designing. This provides flexibility and freedom for altering and adjusting the collection of data, if necessary. Moreover, this research follows a single embedded case study design, in order to enhance the richness of the data required for analysis (Scholz and Tietje, 2002; Yin, 2003).
2.3 Case study method and limitations
‘Case study research is one of the principal means by which inquiry is conducted in the social sciences’ (Thomas, 2011). The case study research method is a preferred method for finding the meaning of a contemporary phenomenon in-depth while in a real-life context (Yin, 2009). Further, Simons (2009) explains that a case study research can contribute to an in-depth exploration from multiple perspectives of the complexity and uniqueness of a particular phenomenon. A case study method of research can be used to exact meaningful information which can be viewed from different perspectives .While a case study method can be seen as a means to a rich and significant data there are some limitations which were considered by the author prior to choosing it as an appropriate research method.
The case study research method can be seen less desirable due to a number of reasons. The main criticism that has been considered for this paper has been the idea of bias. Yin (2009) points out that case studies can lack rigor outcomes, are prone to be biased and lack a more systematic approach. It has been argued that due to the subjective nature of this type of study, there is a wide scope for the researcher’s own interpretations (Flyvbjerg, 2006). It must
17 | P a g e be acknowledged, however, that other research methods are not excepted from bias and the author of this paper has attempted to overcome this limitation by staying open-minded to alternative findings and focusing on staying objective throughout the process.
2.4 Data collection and participants
In order to gather the necessary information for the completion of this case study, the author interviewed, in total, eight employees, of which five were Global Skill Pool Managers and three were Senior Talent Advisors. All the Global Skill Pool Managers and Talent Advisors are responsible for the succession planning process. The respondents were carefully picked, in order to achieve high richness of data and to be able to identify any major differences in the same HR process across two functions. The Talent Advisors have been interviewed with the intention to use a comparison of the same term, succession planning, in a different context. Three of the respondents were directly reporting to the senior management of the department and the rest had different levels of seniority. All of the respondents were aware of the author’s idea and topic of interest.
The sample population was diverse in gender and age, in order to ensure richness of data. The group of interviewees were all long-term employees within The Company, but varied in tenure in their current positions. A detailed table with the characteristics of the sample population can be found in Appendix I. For privacy and security reasons, as requested from The Company, the names of the interviewees are not going to be revealed in this research paper.
The quantitative data was gathered through an internal IT system, which allowed for the topic to be approached from a broader angle and narrowed down to the question itself. The author had to understand how The Company values and treats its employees and who is regarded as talent, in order to be able to understand the underlying assumptions behind a HR
18 | P a g e process such as succession planning. The qualitative data collection was conducted through semi-structured interviews, which are explained in-depth in the section below.
2.4.1 Semi-structured interviews
The data was collected through semi-structured interviews in order to observe and understand the social factors influencing the employees in The Company. Semi-structured interviews allow not deviating from the main areas but also further exploring topics that emerge during the interview and are considered to add value to the conversation. Contrary to structured or completely unstructured interviews, semi-structured interviews allow the interviewer to react to what the interviewee is saying and leave room for new topics to emerge. Leech’s (2002) proposed combination of grand tour questions and floating prompts has being adopted in the interviews, in order to extract all the relevant information needed. Due to company policy the interviews were anonymous, and varied in length. An initial interview protocol was created, however, after the second interview it was amended according to the observations of the interviewer. The final version of the interview protocol can be referred to in Appendix II. The interviews were voice recorded, with the permission of the respondents, and manually transcribed by the author. The choice of voice recording was intentional, so that the author can be fully engaged in the conversation and use active listening to ensure the extracted information is of high quality (Leech, 2002).
In order to create a more comfortable atmosphere, the interviews took place in an informal setting. The aim was for the interviewer to stimulate the interviewee to speak as freely and genuine as possible. This did not have any negative effects on the interviews.
19 | P a g e 2.5 Data Analysis
The coding of the data gathered proved to the most time consuming part of this study. The aim of the coding was to in order to analyse the data, identify patterns, themes and extract as much relevant information about the research question as possible.
The tool used for analysing and coding the data was Nvivo 7. The programme has an updated version, however due to licensing problem the author was not able to use the latest version. Nvivo 7 proved to as useful as the new version and made the construction of the results and discussion easy. The data was analysed and coded into tree nodes. By using the tree nodes, a couple of main themes were identified and further developed. Snapshots of the tree nodes can be viewed in Appendix III. The data was coded into four meaningful categories (refer to Table 1), which were individually analysed in order to gain in-depth information about the wide used of the term soft succession planning and its outcome:
Table 1 - Categories
Category Description
Talent identification
This category was aimed at the identification of talent by both the company and the individuals who were interviewed. This was important to clarify in the beginning of the discussion, which led to finding the origin of the term Soft Succession Planning.
Soft Succession Planning
In this section, it was identified that there is a clear difference between succession planning and the term used by Global Skill Pool Managers, soft succession planning. Further, it became clear that while the academic definition of succession planning revolves around the development of an individual, the process of soft succession planning was revolving around the jobs (i.e. available
20 | P a g e positions).
Implications of the use of the term Soft Succession planning
During the interviews, an issue was identified when using the term Soft Succession Planning. Due to the large size of the organisation and the number of HR processes involved on multiple organisational levels, the line management in the Business appeared to react negatively when the Global Skill Pool Managers were due to engage with them in the soft succession planning process.
Soft Succession Planning – a
misleading interpretation
The discussions with each of the interviewees concluded with the idea that the term soft succession planning, used for the activities that they are performing in reality, is misleading and at times confusing not only to the line but themselves as well.
The above mentioned four meaningful categories will be further explored and supported by actual quotes from the interviewees in the next chapter.
21 | P a g e CHAPTER 3: RESULTS
The information extracted from the documented data, prior to the interviews is vital to the understanding of the current succession planning practices in The Company and their impact. Gaining an understanding of the internal processes, values, aims and goals of the company and the department of Talent and Management was vital. Without the initial information gathered, the author would have not been able to recognise the significance of the misuse of the term ‘soft succession planning’.
3.1 The Company
First, it is important to stress that the organisation in which this research has taken place, is truly global in its operations. It currently has over 101,000 employees across more than 90 countries around the world, which adds to the complexity in execution of any HR practice. It is also of great importance to note where exactly the Global Skill Pool Managers are, in terms of presence and who are they responsible for. From the organisational overview (see Chart 1), it can be seen that the organisation has adopted a matrix organisational structure and it’s divided in several businesses and functions. Each business has a Talent and Development department, part of the HR function, consisting of three to four Talent Advisors. However, in the Project and Technology Business’ Talent and Development department is where the Global Skill Pool Managers operate. They are collectively and solely responsible for technical staff, accounting for over 23,000 employees, ranging from drilling engineers to exploration and R&D employees. The Global Skill Pool Managers are responsible for the internal resourcing and movement of those 23,000 employees across the organisation. According to their job description and the information available on their role, succession planning is one of the most important aspects of their role in The Company.
22 | P a g e Chart 1. Organisational structure
By reviewing the documentation on the Global Skill Pool Managers, a trend was identified. While in the official company policy soft succession planning is required to be an ongoing and important process, in reality there were hardly any records of the work that has been done in this area. Taking into account the current global shortage of technical staff, management of talent has been a prime focus in the industry therefore it was quite puzzling how the process has not been utilized efficiently.
3.2 Talent identification or who is labelled as ‘talent’ and why is it important?
When the interviewees were asked who is considered as ‘talent’ in The Company,
although initially all explained it according the organisational definition, there were different personal opinions on the matter. The organisational definition of ‘talent’ in The Company is
The Company
HR Finance
IT
Health and Safety
UI UI P&T DS
Global Skill Pool Managers
Vertical Line of Business
Ho riz o nt al Funct io ns
23 | P a g e that only the employees who have been hired as Graduates (accounting for 10% of the total population in the organisation) are regarded as talent and have been put on a specific development path with the intention to be groomed to become the future leaders of the company. This can be confirmed when looking at the rigorous structure and high demanding assessment procedures for graduate hiring. When asked for their personal opinion 5 (62%) of the respondents agreed that there should be a specific development path for those high potentials, however, the issue whether the rest should be labelled as ‘non-talent’ has been an on-going debate within the company. One of the respondents said:
‘Talent is something that can be developed with experience and hard work. If the 10% are the ‘talent’ what are the remaining 90% be, not talented enough?’
An important finding emerged when all of the respondents agreed that in terms of HR practices, the labelling of talent had a great significance. Due to the categorisation of employees, different HR practices would be tailored to the different categories – talent or not. After discussing the issues surrounding the term talent, it became clear that this will have an impact on the succession planning process in The Company. A quote from one of the GSPMs can sum up the issue that lies ahead:
‘We don’t agree on who should be talent, and now you will ask me to explain soft succession planning and most importantly... why soft succession planning’
The results from the interviews showed that there is a clear division between the Talent Advisors and the Global Skill Pool Managers with no linkage between their jobs, although overall, the Global Skill Pool Managers should be an extension to the Talent Advisors in the technical world. The difference between the Talent Advisor’s and the Global Skill Pool Manager’s role in the organisation has been summarized in the table below.
24 | P a g e Table 2 Roles and Responsibilities
Talent Advisors Global Skill Pool Managers
Employees accountable for
‘Talent’: 200-300 within the Projects and Technology
Business
23,000 technical staff across the whole Business
Seniority of employees Letter category Job Group 5-1
Succession Planning Including leadership
development Soft Succession Planning
In order to gain the full picture of who exactly the Global Skill Pool Managers and the Talent Advisors are responsible for, the chart below shows a simplified overview of the levels of seniority.
From all of the findings above, it can be observed that the differentiation within seniority has led to the differentiation in HR processes. Due to this fact, that the term soft succession planning has emerged as a form of succession planning but for the lower levels within the organisation. The understanding of the term and the process has been Chart 2 Job Categories
Talent Advisors
Global Skill Pool Managers Letter Category
25 | P a g e misunderstood. The next section will discuss the finding surrounding the term and its significance.
3.3 Soft Succession Planning
The findings in this category were significant towards the answer of the posed research question. The documented evidence of the existence of the term soft succession planning were confirmed and elaborated during the interviews with the participants. It was established that there is a significant difference between the academic interpretation of succession planning and the HR process for employees labelled as talent and the process named soft succession planning in The Company. One of the GSPMs said:
‘What we do is essentially not succession planning. We, unfortunately, cannot develop and tell a person what his next role should be. The employees have the freedom of choice’
When the participants were asked what is their understanding of the broad term succession planning, 63% identified succession planning to be a the identification of a high potential employee, provided with the right development and learning opportunities in order to reach his/her full potential and contribute to the organisational success. From the 8 respondents, 3 (37%) argued that succession planning is a standard HR process, which occurs in every organisation, and only one of the respondents argued that succession planning should be embedded in the organisational mind-set and culture in order to add value. The answers are summarised in the table below.
26 | P a g e Table 3. What is succession planning?
Understanding of succession planning Respondents (%)
Development of employees to reach their full potential 5 (62%)
Well organised HR process within a company 2 (25%)
A mind-set embedded within the company for the
continuation of future success 1 (12%)
The results from the question ‘what is soft succession planning in The Company’, led
to the confirmation of the fact that the term succession planning is used for a practice, which is far apart from the term succession planning as described in the literature review by both academics and practitioners. A respondent explained:
‘Soft succession planning has nothing to do with succession planning; it is not even close to that. It’s just a term that we use.’
All of the interviewed Global Skill Pool Managers (GSPM) explained that the term ‘soft’ succession planning has been established due to the fact that it does not correspond to a similar succession planning process as seen in other companies. The process consists of the creation of two lists with names and potential future job positions, labelled as ‘Ready Now’ and ‘Ready Later’. Those lists may also be used with the intention of having an overview of
the employees who can fill in a critical job position, if such a need arises unexpectedly.
‘The process (soft succession planning) is it is more intended to establish a benchmark for health check to see whether we have the people that we need. Also to identify if there are any gaps and see how we can fill them through external recruitment. It could be used more effectively but that's not being done to my knowledge.’
27 | P a g e In contrast, the succession planning process established for the employees labelled as ‘talent’ consists of their continuous leadership and personal development.
Contrary to common beliefs, results showed that soft succession planning, as part of the GSPMs work scope, is an unstructured process, within the technical space in The Company, performed on an ad-hoc basis. Moreover, findings from all of the interviews showed that the respondents considered the process to be valuable, but doubted the idea whether it is essentially any form of succession planning. One of the interviewees said:
‘There is no detailed plan or detailed actions (resulting from soft succession planning); it is more like a group of people agreeing a sort of direction around the employees. I do see it as useful, but it should really be more than it is if the term succession planning will be used.’
An interesting observation here is that the majority of respondents believed succession planning to be the development of employees in order to reach their full potential and of great importance for an organisation to be successful and have a healthy pipeline of high performing employees. However, results showed that soft succession planning, as used by the Global Skill Pool Managers, is merely an overview of potential candidates for higher positions with no development outcomes or recommendations resulting from the process. An important fact that needs to be mentioned here is that while succession planning is considered to be the investment in training and development of employees (Lepak and Snell, 2002), in The Company, soft succession planning is job position driven, rather than the employee driven. As one of the respondents confirmed:
‘Soft succession planning is vacancy driven, rather than driven by the development of employees. There is freedom of choice for an individual to take up a role or not’
28 | P a g e 3.4 The implications linked to the misleading use of the term Soft Succession Planning
The results from the interviews showed that there are negative consequences resulting from the inaccurate use of the term soft succession planning. All of respondents confirmed that because of the unclear definition of the process and the unstructured manner in which it has been conducted, important stakeholders have expressed their reluctance in participating in the process. The stakeholders who are supposed to be involved and participating in the soft succession planning process varies from line managers, to senior members of the technical community, such as Global Discipline Heads. One of the respondents explained:
‘When creating the lists with employees, ‘Ready Now’ and ‘Ready later’, I need to be
engaged in a discussion with the senior members of the particular skill pool and line management as well. Their input is vital as they know their employees on a more intimate level. However, often when soft succession planning is mentioned people react in a negative way, expecting it to be a tedious and lengthy process. Frankly, they don’t understand why they have to do it, when there are similar HR processes in their own departments dealing with the same subject on a deeper level.’
All of the respondents agreed that because the process is vague and unstructured, there is a lack of understanding to what are the elements that need to be covered, how often it should be reviewed and most importantly, what is its the desired outcome. This results in a resistance from important stakeholders to look at the process as beneficial and important for their employees, but rather look at the process as a tedious exercise that needs to be completed and forgotten about.
‘Although in some situationx the process has been successful in getting the right people in the right place, majority of times the lists (RN and RL) are just circulated between me, the global discipline heads, their discipline leads and back to me without much input’
29 | P a g e The information gathered from the documentation and the interviews also showed that the process is very disconnected from the talent management strategy and practice as a whole, which has made it a ‘tick box’ exercise rather than an underpinning foundation of the healthy pipeline of high performing employees.
The most puzzling finding from the information gathered is the fact that although employees have been mentioned on a list for progression (succession), they have not been notified as to what the consequences or the outcomes of this soft succession planning process are. All of the interviewed Global Skill Pool Managers were asked whether the employees labelled as ‘Ready later’ receive any kind of feedback for improvement and development,
only 1 (14%) engages the employees in feedback sessions. The rest of the Global Skill Pool Managers explained that it is impossible to engage those employees due to the sheer volume of people they need to contact.
‘I simply don’t have enough time to give some feedback. If I need to notify everyone why they are not ready now or didn’t get the job, I will not be able to deal with my other responsibilities. It’s just not feasible.’
3.5 A misleading interpretation of the term Soft Succession Planning
The results from the information gathered from each of the interviewees concluded with the idea that the term soft succession planning, used for the activities that they are performing in reality, is misleading and at times confusing not only to the line but themselves as well.
It became evident that there is no standardised approach to the execution of the process and each of the respondents had their own interpretation on how the process should look like, be executed and how they should approach it. There are also no clear guidelines to
30 | P a g e what the format should look like and what the outcomes should be. The majority of the Global Skill Pool Managers (75%) explained that there is no major emphasis placed on soft succession planning in terms of strategic approach. Further, due to the various approaches that have been adopted, information sharing is non-existent and there is no evidence of the possibility of implementation of a best practice approach.
All of the respondents were asked what should be changed in the process and how would the ‘way forward’ look like. The responses are summarized in the table below.
Table 4. Change in approach
What should be changed? Respondents (%)
Recognise that it is not succession planning, Add structure and clear guidelines, with the change of
terminology used
2 (25%)
The process should be reviewed and evaluated in detail,
in order to avoid any misunderstandings in the future 2 (25%)
The importance of the process from a business point of
view and its strategic implementation 1 (12%)
The mind-set behind the process should be creating and
adding strategic value 2 (25%)
The process should be left in the hands of the skill pools’
HR advisors 1 (12%)
The results indicate that all of the respondents recognise the need for change and the complications resulting from the lack of clarity and structure of the processes.
‘There is definitely a need for looking into this topic. The process could be very beneficial, but at this point of time it is considered by others to be more than it actually is.’
All of the participants agree that the overview that the current soft succession planning process provides them with is useful and could potentially add value. However, the
31 | P a g e unclear use of terminology and the fact that the process is disconnected from any other HR process has resulted in misunderstanding, reluctance to be given further attention and no impact on the development of a healthy pipeline of high potential employees.
32 | P a g e CHAPTER 4: DISCUSSION
The results from this research confirm the assumptions made by academics and practitioners (Collings et al, 2009; Lewis and Heckman’s, 2006) that although the topics of
talent management and succession planning have received a vast amount of interest, it is still not understood and under-explored, especially in large multinational organisations. It can be assumed that The Company has realised the importance of the talent management and its processes and benefits, however there is mismatch between concept and practical execution. It is evident that in a multinational organisation such as The Company, a lot of emphasis is placed on procedures and processes, however no real strategic approach has been taken when looking the Global Skill Pool Managers’ soft succession planning process. The current research and in-depth analysis has contributed to identification of the problematic areas and the implementation of recommendations aimed towards the improvement of the process.
After reviewing all the gathered data, it can be concluded that the term soft succession planning has been used for a process, which does not correspond to the essence of succession planning. The author concludes that the process which has been named as soft succession planning in The Company resembles more of a replacement planning process rather than succession planning. Rothwell (2011) identifies replacement planning as a process of identifying short-term and long-term backups who can assume a role of responsibility if the occasion arises. In his paper, he also identifies the possibility for replacement planning to be easily mistaken for succession planning: ‘It should not be confused with succession planning’ (Rothwell, 2011, p.1). A number of similarities could be found between Rothwell’s (2011)
replacement planning process and the process named soft succession planning in The Company.
33 | P a g e The most striking similarity is the use of ‘Ready Now’ and ‘Ready Later’ lists which are one of the main processes in replacement planning and in The Company’s soft succession
planning process. Further, replacement planning is solely focused on the replacement of key job positions rather than the development of people. This is where replacement planning is different than succession planning. Rotwell (2011) identified succession planning as identifying the needs by level, developing a pool of people who will be considered for progression or promotion. Soft succession planning in The Company does not contribute to the development of a pool of people, but rather, focuses on the important of critical positions, which would need to be resourced.
Based on the commentary in the literature review and Rothwell (2011), replacement planning is a short-term identification process for critical emerging positions. The qualitative research conducted in The Company evidences that the process of replacement planning is widely used not only for critical emerging positions but as a general process to fill technical human resourcing gaps. The Company uses the term soft succession planning which in essence, and per human resource literature, essentially is a replacement planning process. While replacement planning is the underpinning foundation to the succession planning process, The Company does not involve itself in succession planning because key factors such as identification of talent, their grooming via structured and unstructured training is not defined as part of a Global Skillpool Manager’s roles and responsibilities. The Global
Skillpool Managers are heavily focused on matching positions to individual candidates based quantitative identifiers that establish proven credibility such as previous roles and performance ratings, rather than matching people to positions. The common misuse of the term succession planning results in confusion and mismatched expectations of stakeholders within the Business as to the recruitment service provided by the Global Skillpool Managers. The policies and frameworks set out from senior executive management are unclear and do
34 | P a g e not lay importance to the concept of succession planning. They are heavily focused on ensuring that a vacancy is efficiently filled by picking from a pool of available human resources.
In conclusion, the findings from this paper have confirmed that the topic of succession planning is under-developed and easily mistaken with other processes, such as replacement planning, workforce planning, etc. There is a clear mismatch between succession planning as implied in Human Resource literature and how The Company propounds this concept in practice. Processes within The Company are likewise contradictory to what the concept of succession planning propounds. The information and results gathered during the project have contributed to the formulation of a feasible strategic change proposal within the Projects and Technology arm of The Company. It has raised awareness of the issue of misinterpreting a process and how the process can be made more effective, efficient and aligned with the Business’ needs and goals.
4.1 Limitations and recommendations for future research
The data collected and used in this case study has been collected in a multinational organisation based in the Netherlands. Due to the large size and the complex organisational structure the respondents were limited to mainly one department. Moreover, a contributing factor to the access to the data and interviewees has been granted to the author as part of an internship and has been limited to a certain level of access. The results of this case study have not been examined through a cultural lens. The results would not be generalized and may not account for the state of the succession planning process in other multinational organisations.
An important limitation which needs to be mentioned is the time the author has spent in gathering the data in The Company. The access to the information was granted for three months and some documents and topics could not be discussed due to a signed confidentiality
35 | P a g e agreement between the author and The Company. The restricted information could have contained valuable data which could have contributed to a better understanding of the process and the underlying reasons behind the current set up. Further, the author did not have access to the Global Skill Pool Manager’s key stakeholders, such as the technical skill pool senior
management or the line management in order to confirm the assumptions made about the soft succession planning process.
Recommendations for future research would be to explore the different levels of talent management in multiple multinational organisations, which a wider scope and agenda. Furthermore, a vital factor will be the reach to a wider stakeholder audience and most importantly the reach to the employees themselves.
36 | P a g e CHAPTER 4: CONCLUSION
This research investigated the human resource practices within a large multinational organization (The Company), which operates in the Oil and Gas industry domain. A qualitative study was conducted to enable an in-depth analysis of the concept of succession planning and how it is applied within a truly multinational and diverse employee pool of more than hundred thousand employees within The Company. Whereas succession planning in its true form is observed primarily in small family owned businesses, it was interesting to observe and analyse how this concept has been proliferated in such a large organization.
The Company has coined the term soft succession planning which is assumed to denote the succession planning process. The results from various in-depth semi-structured interviews demonstrate that what is called the self succession planning within The Company is actually merely a replacement process which does not entail a human intimate framework allowing people to organically grow into senior technical positions. Some key characteristics of a succession planning process are missing.
There is a lack of sufficient structure around training and development of the technical workforce to allow them to emerge as suitable candidates for future senior positions. The responsibility of training and development is laid solely on the candidate themselves. Businesses prescribe domain specific training for their employees but that is very much focused on their current role and doesn’t help in preparation for future roles.
The resourcing process to fill vacant technical roles is highly mechanical and short term in nature. The priority is to get a vacant position filled in the shortest time span by matching a position to a pool of resources based on quantitative metrics such as an individual’s prior year’s performance, recognized accreditations and prior relevant experience. Further, there is no feedback mechanism to those candidates who are not selected
37 | P a g e for a particular role, thereby denying them the opportunity to identify how they could further develop themselves to be deemed fit in the future.
Qualitative interviews during the research revealed that Global Skillpool Managers who are accountable to ensure vacant technical positions are resourced timely and appropriately, don’t believe that the succession planning process within The Company adds
any value. While succession planning is marked as a priority for their role, the Global Skillpool Managers struggle to exercise it in its true form due to a number of reasons. First, the number of resources that a Global Skillpool Manager is accountable for, is very high given the personal and high intimacy engagements required with these resources. Second, they lack the tools and guidance required for them to be able to appropriately execute their responsibility of succession planning. There is no guideline or framework set out by senior HR management which prescribes what succession planning should like, only processes that need to be adhered to. Third, they feel stretched in bandwidth due to various other responsibilities, namely, managing the resourcing process for other non-technical and lower grade roles.
The case study also revealed an inherent communication gap between Talent Advisors, who are accountable for developing and resourcing senior management positions and Global Skillpool Managers, who are accountable for developing and resourcing higher grade positions, those that will eventually be the successors to senior management. This lack of communication is a result of the mere replacement process exercised by Global Skillpool Managers, which means that a Talent Advisor is not able to gain extensive information about potential resources but just a list of names. Since both parties work in silos, this adds to the complexity by further focusing either party on the vacant technical positions they need to fill, rather than the breed of resources they should have within their pool to fulfil both senior management and high grade positions.
38 | P a g e The findings from this case study provide the basis to confirm the claim that the topic of talent management and succession planning is under-explored in large multi-national organisations. The organisation in which this study was conducted has benefited immensely from the research. The case study has also contributed to the creation of recommendations of how The Company can adopt a more efficient and strategic succession planning approach while moving away from the incumbent replacement planning process, which is short term in nature. In conclusion, this case study contributes to one example, albeit in an organization with well defined human resourcing processes, that succession planning as it is conceptualized is not how it is implemented. Further research in other large multinationals, potentially in other industry domains, is required to confirm whether this holds true for large multinational organisations in general.
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