- Organizations have traditionally relied on annual succession planning.
- Identifying and growing future leaders is now an always-on practice to keep pace with the rapidly changing business environment.
- AI is the only way to keep up with people’s skills and capabilities in real time — and surface that information to organizational leaders who need to know who to develop next.
When I talk with CHROs and talent leaders, one topic keeps coming up: adaptability. Discussions are around how organizations — and especially leaders — can quickly adapt to new challenges and opportunities and navigate that uncertainty with confidence.
The problem is that the traditional approach to succession planning as an annual event is no longer sufficient to keep pace with today’s complex changes. Today, succession planning needs to be a real-time initiative.
The good news is we now have sufficient amounts of objective data and AI to identify potential leaders. More organizations are moving to this new model of real-time succession planning, and discovering that there’s a wealth of internal skills and talent available they can easily identify and develop.
Keith McCook, Ph.D., Senior Director of Psychology, Productive Research, and Design at Heidrick & Struggles, recently joined me to talk about how more HR organizations are becoming skills-based, and how coupling that approach with AI-powered talent
Watch the webinar on how to use AI to foster skills-based growth and help with succession planning, now on demand.
Shifting to a dynamic, skills-focused approach with talent intelligence
Skills are a hot topic in HR with many organizations making the leap to become skills-based organizations. When you look at the talent life cycle, skills are inherently linked with how employees move through your organization from the time they are hired until they retire.
The challenge is that HR hasn’t always had the right tools to examine skills at a granular level. HR data is typically focused on an employee’s job, or their job history at the organization. It’s not necessarily a complete profile of an employee’s skills.
But with AI-powered talent intelligence, HR organizations have a better understanding of what employees may have done in previous jobs, the skills associated with those job experiences, and what skills they may have now gained in moving through the organization. AI makes it easier for HR and business leaders to see the career and skills progression in real-time, and use that data to inform better decision-making.
The manufacturing industry went through a similar transformation during the rise of the Internet of Things. Digitization of everyday products, like appliances in our homes, produced an abundance of new data about these product life cycles that never existed before. This new information could be used to inform product updates and changes to improve performance and customer satisfaction.
We’re now at the point where we can do something similar with an employee’s career path by collecting data to dynamically manage the talent life cycle. With AI and talent intelligence, HR organizations can build a skills taxonomy and a skills inventory to get a real-time understanding of what’s happening with talent within the organization.
In that skills analysis, AI learns about skills adjacencies and individual learnability, which powers connections among the various elements of the talent life cycle. HR organizations use the technology to understand in-house skills while also learning about the skills requirements still in need while organizing and administering talent processes in a stable yet dynamic way.
Why organizations should move from a static skills taxonomy to using a dynamic skills approach.
Related content: Read why it’s time for AI-powered talent intelligence in your HR tech stack.
Moving toward real-time succession planning
Whether your HR organization is using AI or not, it’s here to stay. Technology is impacting the world of HR and the way we address processes — and every single role in the organization.
Talent leaders are trying to recruit or develop talent and build succession plans for roles that are increasingly being done through human-machine collaboration. The nature of those roles, related skills, and the way the work is done is rapidly evolving. In talent planning, it’s like trying to hit a moving target.
This is not a question of people versus machines — technology is creating an environment of human and machine collaboration.
“You can use AI as part of your talent decisions with a steady hand on the rudder,” said McCook in the webinar. “You have a human monitoring how things go. In this way, we merge the strengths of both AI and humans. AI brings systematization, objectivity, and pattern recognition at scale with millions and millions of data points. Humans do what they do best: interpretation, evaluation, and nuance. This way the HR organization spends time on higher value activities and lets AI do the drudge work, which it can do more effectively than humans ever could.”
AI-powered talent intelligence allows HR organizations to gain visibility into skills through aggregating disparate data points and making sense of the data. It also incorporates data from market intelligence that allows for trend analysis and benchmarking capabilities.
If you’re doing this for the entire organization, you can start to apply elements of succession planning or skills-based role readiness. You can identify rising and declining skills, calibrate roles for current and future needs, and standardize roles across the organization in a dynamic way that allows real-time updates.
This can be done across the entire organization at all levels, especially where you may not be measuring, usually deeper in the organization. This is where employees may be receiving education, and using new tools or innovating — and not necessarily in some areas that tend to focus on traditional succession planning. And just as importantly, in real time.
“Succession planning typically happens in an annual cadence,” McCook said. “In my experience, job descriptions and role requirements typically get updated even less frequently than that, maybe every two or three years those get touched.
“AI and talent intelligence really equip talent leaders and organizations to do succession planning on more of an ongoing basis,” he continued. “It allows you to stay fresh and stay relevant because those stale job descriptions are often irrelevant or need to be changed by the time an individual gets to the point of taking on that new role.”
Another way to consider where succession planning is heading is a reference made by my former Gartner colleagues. Traditionally, organizations have relied on pipeline management, or identifying talent deep in each group and moving them up to replace leadership.
The new way to think of this is portfolio management, a broader view of all your talent in the organization who could be developed for several future roles based on their skills and potential, and how that serves your overall business strategy.
This is a significant shift in thinking as a pipeline strategy is designed to support jobs, whereas a portfolio strategy supports people. This is a more adaptable way to manage succession planning, especially as the future becomes more unpredictable.
How AI-powered talent intelligence helps identify tomorrow’s leaders
The big ROI is when HR organizations do real-time succession planning for top leaders. The first step is looking at the skills needed then identifying the talent, or portfolio of talent, and then layering in leadership assessments. This is where we are partnering with Heidrick & Struggles to help organizations look at business impact, leadership capability, and leadership potential for success in a particular role.
In addition, AI-powered talent intelligence for succession planning allows organizations to uncover hidden talent who may not be in the current leadership pipeline but should be based on their capabilities, potential, and skills. With AI, HR can cast a much wider net by looking at fundamentals that make up capabilities, skills, and potential for success.
Becoming a skills-based organization using AI means your organization can move from annual succession planning to real-time succession planning. Reshaping how employees move through your organization to step into leadership roles by understanding rising and declining skills to create a portfolio of talent enables both HR and the organization to be agile in a world of work that’s rapidly changing.
Jason Cerrato is VP, Market Strategy, at Eightfold AI. Before joining Eightfold, he was an HCM industry analyst with Gartner and held talent leadership positions at United Technologies for over a decade. Cerrato is the co-host of The New Talent Code, a podcast by Eightfold AI.
Watch the full webinar with Eightfold and Heidrick & Struggles “Leveraging AI to foster skills-based growth and succession planning,” on demand now.