Succession_Planning

After Lone Star Bank’s current CEO Harry Ritter agreed to accept an attractive severance package and serve out the rest of his year and then to be replaced, he offered some advice to the organization. Ritter suggested Lone Star hire the bank’s senior vice president of operations, Bob Bowers because he knows the inner workings of the bank better than anyone else on the board. Although the CEO may have been sincere with his suggestion, this is not always the case. An organization should not leave it up to the CEO to identify a successor because they are typically not trained or experienced in staffing, and they may also have selfish motives in appointing a successor. At the same time, CEOs many also avoid recommending a CEO in hopes of keeping their job. I think that Lone Star should take advantage of succession planning software and try to hire internally. I feel hiring an employee internally will benefit Lone Star because they are not planning for long term, and they need someone who knows the company and its investing well. Hiring externally is good for some positions, but considering it is a CEO position and they need an employee who will be knowledgeable about investments for the company, they should first look at internal hiring. It is essential for Lone Star to have a succession plan for the CEO position. Succession planning at financial firms, including banks, has always been important but with the credit crisis putting a great amount of focus on the importance of strong management, it is now something not even the most strongest executives can ignore. An example I found to explain it significance concerned Bank of America Merrill Lynch, which took 11 weeks to find a replacement for outgoing chief executive Ken Lewis even with the announcement of his resignation. Because of this, senior managers at the firm admit the failure to quickly find a replacement for Lewis caused difficulties, as important decisions about the running of key divisions such as investment banking were delayed pending the naming of a successor. Not having a succession plan can really set a company back and cause them many other problems as well. I would advise Lone Star to invest in a software that will assist the organization with succession plan. (Ex. Saba Succession). This will really help Lone Star Bank in planning for the short-term and the long-term. I think Lone Star Bank should have a succession plan in place for all of the top management positions. Key benefits for having a succession would include having an adequate supply of employees to fill future key positions, providing career paths and plans for employees which will help them in employee rention and performance motivation. This will also help the to ontunally review and keep up with the need for employees as organizational changes occur more frequently, and it will enhance the organizational “brand and reputation as an enviable place to work. Longer-term succession planning should include mid-level and lower-level managers, as well as other key non-management employees. A powerful source of internal recruitment is found by using succession planning, most which include recruitment planning. Lone Star Bank should refer to these plans in order to identify the best individual to take the position as a CEO for the organization. Because the company has been in existence for over 30 years now, and has experienced problems in the industry in the past couple of years, Lone Star Bank should definitely have a succession plan already in place. Succession plans includes replacement charts, which indicate positions and who is scheduled to fill those slots when they become vacant and the time until the individual will be ready for the assignment. Succession plans are organized by position and list the skills needed for the prospective position. Replacement planning usually restricts consideration of employees for a particular position to a more narrow amount of candidates working in a particular section or department rather than the whole organization. Having a succession plan, especially for CEO’s is a key factor in helping to avoid probable fiascos. Lone Star should make a list of characteristics and behaviors that make up a successful CEO. How should other internal candidates be identified and recruited' Other internal candidates at Lone Star bank could be identified and recruited though job postings, as well as succession planning. Each applicant performance and qualifications will be looked at and if need by seniority will be considered if they are having a hard time deciding between a few applicants. Whether Lone Star Bank decides to hire internally or externally, they will still have to develop a recruitment guide, a formal document that details the process to be followed to attract applicants to a vacant job. How would you advise Lone Star in getting such a plan' I think Lone Star Bank would benefit greatly if they had a succession plan. I would advise Lone Star to invest in a software that will assist the organization with succession plan. (Ex. Saba Succession). Steps in internal recruitment process: 1. Recruitment planning What is succession planning' It is a process for preparing people to meet an organization’s talent needs over time.1It Succession planning at financial firms, whether they be banks, fund managers or private equity firms, has always been important but with the credit crisis putting a renewed focus on the importance of strong management, it is now something not even the most powerful executives can ignore. Bank of America Merrill Lynch, for example, took 11 weeks to find a replacement for outgoing chief executive Ken Lewis despite the announcement of his resignation in September. While the bank’s market share and league table rankings were unaffected by this state of affairs, senior managers at the firm admit the failure to swiftly find a replacement for Lewis caused problems as important decisions about the running of key divisions such as investment banking were delayed pending the naming of a successor. This is not to underestimate the frequent difficulty of identifying a capable and willing successor for jobs that can carry such massive expectations and a high degree of public scrutiny. Top bankers, including Winters, had already been approached by Bank of America Merrill Lynch to replace Lewis, but turned down the position, leading the bank to appoint an internal candidate in Brian Moynihan. One senior banker said: “You really don’t want to be the guy coming in immediately after a chief executive like Lewis as it’s going to take some time to sort out the legacy issues. I’d say you want to be the guy coming in after his successor as that’s when you’ll get the credit.” Investors and governments can no longer afford to allow the vanity of top financiers to prevail on succession planning – this year is likely to see many more firms being forced to address the issue.