Organizational Alignment & Succession Planning in the Great Upgrade Era 

January 14, 2022 

By: Megan McIver, Dietrich Partners 

It is no secret that companies continue to face an ever-evolving challenge of addressing the needs of  retaining and recruiting talent. Movements like the great-upgrade (formally known as the great  resignation), more flexible work-life balance, and shifts in power dynamics between employers and  employees are forcing leaders to evaluate and implement human capital practices and policies in creative  new ways. 

Currently, 46 percent of Middle Market Executives rank talent management as the second most important  internal challenge over the next 12 months (Source: The National Center for the Middle Market. “2Q 2021  Middle Market Indicator: An Uneven Recovery as Some Companies Excel While Others Continue to  Struggle”). As a management consulting firm, Dietrich Partners has witnessed and worked with clients to  address the high priority of key issues including employee turnover, ineffective leadership, inconsistent  communication, and skills gaps of current teams. The result is long overdue conversations around the  value of Organizational Design, Succession Planning, Understanding the Employee Experience and  Change Management.  

Organizational Design 

“We’ve been so myopically focused on getting through the pandemic, I’m not sure we have the right  people in place to implement a high-velocity growth strategy in certain markets.” (CEO, Food  Manufacturing Company) 

When the pandemic hit, leaders were forced into crisis mode overnight, often requiring an “all hands-on deck” mentality. What was meant as a band-aid solution to address the immediate need, in some cases,  has remained the status quo almost two years later leaving executives to question if they have the right  people in the right places doing the right things. As we collectively catch our breath and adjust to living life  in an endemic state, it is time for executives to firmly evaluate their organization’s structure.  

By resetting expectations of individual roles, coupled with an evaluation of the skillsets required within  each role, companies can better align individual employees to the roles that will best suit their skillsets.  Through this process, leaders are also able to identify areas of deficiencies where they may need to  provide additional training or conduct external recruiting to meet a specific need. 

Succession Planning 

We’ve all heard stories of leaders who say, “I’ll retire in the next 5 years”. Yet somehow, that timeline  seems to reset each year only extending the timeframe for transition. While properly planning for C-level  succession is key, it is a common misconception that succession planning only applies to the person in  the corner office. Effective succession planning incorporates all critical roles within the company. 

Many companies felt the effects of poor succession planning as over 3 million retirees left the job market  in 2021. This accounts for nearly half of the missing workers in the labor market, leaving companies to  scramble to find replacements and ensure transfer of institutional knowledge. 

(https://www.bloomberg.com/news/articles/2021-10-22/covid-early-retirees-top-3-million-in-u-s-fed research-show)  

Leaders should view succession planning as a living, breathing, evolving plan – similar to an effective  strategic plan. By outlining a course of action for a one (1), three (3), and five (5) year outlook, leaders  can guide a conversation around organizational structure that aligns with company growth, internal  development needs, and external recruiting needs.  

Combining clear succession plans with leadership coaching and development, companies can better address hard and soft skill needed within both current and future leadership. 

Understanding the Employee Experience 

“I have learned that when you have the right people in your organization, retention isn’t just about the  money. People want to be paid what they think they are worth, but they also want recognition, they want  to see their career path (money, responsibility, titles) laid out for them with crystal clarity, and they want to  enjoy coming to work every day, which is a combination of being passionate about they are doing and the  relationships they build with people they are doing it with.” (Matt Joblon, CEO at BMC Investments) 

This sentiment is shared by many of Dietrich’s clients. Leaders continue to provide competitive  compensation packages, but also understand the value of an individual employee’s experience. Mapping the life cycle of an employee – from first contact through retirement – provides a detailed understanding of where companies shine and where there are potential areas of improvement. This activity often brings to light aspects, both positive and negative, that would otherwise not be expressed by employees. Items  like reducing unnecessary administrative work, updating their workspaces (at home or in-office), providing  creative benefits to fuel passions, and implementing “breakfast with the boss” programs are all examples  of how companies can elevate the employee experience. The key is to listen to the unique needs of your  employees and act on the items that are feasible to implement.  

Change Management 

While change management has historically been viewed as a “nice to have” in the eyes of many  executives, leaders are now seeing the value in change management programs. Driven by employees for  increased transparency and consistent communication, change management has proven critical to the  success of implementing new habits, procedures, and ways of life within an organization.  

Over the last 6 months, Dietrich has seen an increased demand for outsourced change management  services as executives seek an objective resource to provide a range of tools, training, and  communication materials, given it can be difficult for leaders themselves to implement this change given  their day-to-day responsibilities of leading the business. These outside resources not only bring best-in class methodologies from a range of industries, but they also provide the discipline and accountability  required for successful delivery.  

People make companies who they are. As the world continues to evolve into a “people first” mentality, it  will become increasingly important for leaders to be proactive with their strategies, policies, and planning  around human capital. Leaning on a combination of internal teams, external consultants, and best  practices, leaders are able to create multi-faceted approaches to address the issues at hand in attracting  and retaining their talent.