Grooming the Next Generation; Sustain Competitive Advantage through Succession Planning and an Early Career Development Program
Henry, Kasthuri V., Strategic Finance
Aviable succession plan for ensuring business continuity is crucial for a company to be able to sustain value for its stakeholders. To create a successful plan, the corporation must have a steady stream of resources that are valuable, rare, and not imitable. When the company belongs to the service industry, its most valuable resource is its intellectual capital, represented by its team of knowledge workers, so attracting, retaining, and developing the best minds to collaborate and deliver cutting-edge solutions to customers becomes the underpinning of the business. Aon Corporation built such a culture.
A major part of Aon's succession plan is the development of young talent to effectively contribute in the social exchange process and establish trust-based, business-to-business relationships that will nurture and grow the business. This pipeline of future knowledge workers comes from universities in the communities in which the company operates. Acquiring, retaining, and serving the client base necessitates a relationship-based approach to business development, so the social network and the ability to leverage relationships are required skills for doing business.
Motivation for the Plan
Aon provides risk management services, insurance and reinsurance brokerage, and human capital consulting through its 59,000 employees in more than 500 offices in more than 120 countries. The company grew through acquisitions. In the early 2000s, it integrated its various business segments and streamlined its operations to better deliver the customer value proposition. During this process, management made key observations about the organizational resources, customer base, and success factors necessary for an effective partnership between them. Here's a summary of the observations.
The existence of a generational gap in the workforce: Baby Boomers dominated the senior team, and there was no tangible game plan for when they retired. Also, 45% of the workforce was composed of Baby Boomers.
Growth and related needs: Business growth required additional knowledge workers. Since the business was specialized, recruiting needed to be strategized to guarantee long-term success.
Shift from male to female client contacts: The landscape of risk managers was changing in the United States. More women were entering the field of risk management at the customers' businesses, which resulted, for example, in a shift from clients wanting to do business over a game of golf to clients wanting to do business over a spa outing. Yet Aon's workforce continued to remain predominantly male.
Technological progress in the industry: Technology became all-pervasive, which started influencing how business was done as people were constantly connecting at all hours via mobile devices and social media as well as traditional means. Thus, a technology-savvy generation of knowledge workers became necessary to backfill the human resource pipeline.
Diversity: Aon had become increasingly conscious of the varied ideas and thought processes encompassed in a diverse workforce and made a targeted effort to build such a dynamic team.
These findings became the motivation for exploring equitable business solutions and culminated in Aon creating an Early Career Development Program (ECDP). The goal was to develop a scalable program that addressed the needs of the immediate future while remaining flexible to evolve as the dynamics of the business warranted. As the regional CFO based out of the corporate office, I was in a position to partner with the human resources team at Aon to develop the program and the model.
The Plan Model
The Early Career Development Program consisted of Rotational and Direct Development Programs that became a pipeline for future talent and business-unit long-term added value. The internship program was the feeder program, and the employee retention rate was 96% when entry into Aon was via this route. …