Succession Planning
for Electric Cooperatives

At GreatCo-Ops, succession planning is personal to us.  Before launching GreatCo-Ops, our founder experienced the deaths of two of his direct bosses as a result of massive heart attacks.  One of them, Wayne, dropped dead at the wheel of his SUV while driving his wife to the movie theater one Sunday afternoon.  The other, Keith, was not feeling well during a meeting with our founder, left the meeting to go home early, and fell to the floor, dead, in front of his wife the moment he got home.  Both of these tragedies left employees in shock emotionally, and it left the organizations in a state of disarray because no succession plans had been developed.

We all have stories like these of leaders whose journeys ended abruptly due to death, illness, accidents, a family crisis, or another significant event.  Other leaders have simply walked out the office door with little to no notice to pursue other opportunities.  Others have been forced out due to misconduct or mismanagement.  Then there is the growing wave of retirements by employees in mission-critical roles in cooperatives that is making it more challenging to staff key positions.  All of these departures represent significant risks for co-ops.

Risks related to mission-critical roles must be mitigated, and any such mitigation approach starts with a good succession plan.

This makes succession planning – particularly for mission-critical roles – a best practice for electric cooperatives.  And it is more important now than ever.

Keep reading for insights and tips that will help you create an excellent succession planning process at your cooperative.

The Big Picture

What Succession Planning Is

Simply stated, succession planning for an electric cooperative is the process by which co-op management ensures that mission-critical positions can be filled with qualified candidates when necessary.  Unfortunately, for a variety of reasons, perhaps mostly resulting from a lack of time due to the increasing demands of managing an electric system today, many cooperatives do not have an effective succession planning process in place.  This creates significant risk for the co-op and uncertainty for every employee in the organization.

This risk is heightened because of the war for talent, challenges many co-ops have in attracting talent to their oftentimes-rural areas, and the significant changes and challenges on the horizon for the industry.  Given these factors, to thrive in the turbulent future ahead, electric cooperatives must ensure a robust pipeline of talent ready to fill key positions.  The only way to accomplish this is through the design and implementation of a succession planning process based on accepted best practices. 

Losing key employees is part of the nature of organizational life, and preparing for such losses is a hallmark of effective co-op leadership.

What Succession Planning Is ­Not

To be clear, succession planning is all about the future, not about today.  As a result, it is not about evaluating anyone’s performance in their current role, except to the extent that the characteristics required for success in their current role are applicable to the role for which they are being considered in the future.  Instead, succession planning is about identifying candidates for future roles and creating and implementing development plans to prepare them for those roles.  Succession planning is also not a referendum on a particular leader’s performance who currently occupies a mission-critical role.  Instead, it is an acknowledgment that his/her role is vital to the success of the cooperative, and it is the management team’s duty to ensure continuity in that position through effective succession planning. 

Trust And Transparency In Succession Planning

It comes as no surprise that succession planning must be built on a foundation of trust and transparency.  Individuals in mission-critical roles must trust that succession planning is not being conducted so that the cooperative can replace them with less costly employees.  They must trust that their value to the cooperative is actually enhanced through succession planning, because they will become better coaches and mentors to their employees.  They must trust that the board and CEO are supportive of succession planning.

To overcome key employee resistance to succession planning, transparency in the process and clarity around motivations behind the process are paramount. 

The employees being considered for participation in the succession planning process deserve transparency as well, particularly surrounding what this actually means for them.  Co-ops must be clear that the employees involved in the process are not being guaranteed promotions.  Instead, the cooperative believes they have the potential to move up the organizational hierarchy under the right conditions at the right time, and the co-op is making an investment in them to make them competitive for more senior or more challenging positions when those become available.  To be fair to employees, they should understand that promotions or moves into more challenging roles are not a given.  No signals to that effect should be sent, and it should be made clear that competition may yet be intense for new roles, both from others inside the cooperative and from the outside.

With the proper approach to communications, resistance to succession planning can be overcome.  (To learn more about our succession planning service, which includes communications assistance, click here.)

Costs And Benefits Of Effective Succession Planning For Co-ops

From a cost perspective, succession planning requires managerial time and attention (though less than one might imagine if the process is structured properly) and investments in employee development.  Oftentimes, budget is also allocated to a consulting firm to assist with designing the ideal process for the co-op and assisting with implementing it.

The benefits are many.  Ensuring that the cooperative can staff mission-critical positions has obvious value.  Greater levels of certainty in staffing key positions reduces risk, improves the board’s confidence in management, provides employees a better understanding of their future and more confidence in the cooperative’s future, and, lastly, helps protect the cooperative against unforeseen disruptions.

Moreover, our surveys of almost 1,500 co-op employees indicate clearly that a lack of career progression is a primary concern for them. 

Our data show that dissatisfaction with promotion opportunities is the second-most significant concern for co-op employees (behind internal communications). 

Co-op employees are less satisfied with career progression than they are with pay, benefits, or their relationships with their supervisor and peers.  Because of this, co-ops that get succession planning right will see higher levels of employee retention, engagement, and satisfaction.  Finally, excellence in succession planning provides co-op leadership with valuable insight into the depth of talent within the organization, as well as gaps that may need to be addressed.  

These are vitally important benefits, especially given that excellence in human capital will be the key to future success for electric cooperatives as we enter the disruptive years ahead.

Getting Succession Planning Right At Your Electric Cooperative

Succession planning by its very nature must be focused on the future, both the near future and longer-term.  At GreatCo-Ops, we call these two time horizons of succession planning Tactical and Strategic, respectively. 

Tactical Succession Planning is designed to quickly identify individuals who will fill a mission-critical role in the near term in case of an unexpected departure of a key employee.  To accomplish this, individuals currently holding mission-critical roles should be required to identify (in partnership with a more senior leader or HR as appropriate) at least one person to take their position if needed, even if for a short period of time.  In addition, in many cases, individuals holding mission-critical positions should be required to share with senior co-op leadership or HR a written description of how to perform their most important tasks.  Importantly, the cooperative also needs to ensure that a sudden departure of a key employee does not result in lost passwords, a lack of accessibility to critical systems, and so forth. 

Some mission-critical employees may feel uncomfortable with providing such granular information about how they do their jobs, for fear of being more easily replaced.  However, if this expectation is placed upon all employees holding mission-critical positions, and if management communicates effectively about the reasons why this is required as a part of a larger succession planning and risk management effort, those concerns can be reduced.

Strategic Succession Planning is focused on the cooperative’s longer term needs in mission-critical roles, both roles that currently exist at the co-op and those that may not yet exist.  This is where the really interesting work begins in connecting future human capital needs to the co-op’s strategic plan, its vision for the future, and the demands that will be placed upon the co-op by external factors long term.

Achieving Excellence In Strategic Succession Planning

GreatCo-Ops has created a step-by-step process for Strategic Succession Planning at electric cooperatives that follows best practice guidance from professional associations, university research, and major consulting firms.  We share these steps below as our way of assisting cooperatives with establishing their own process, and we stand ready to assist your cooperative if you would like to engage outside expertise.

Please keep in mind that, if you choose to engage us for succession planning, we will do much of the heavy lifting for your co-op throughout the steps described below.  Our job is to make this straightforward, successful, and time-efficient for you.

Step 1:  Make the Case for Succession Planning to the Board, Senior Staff, and Employees

To be successful, succession planning must have the support of the board, senior staff, and employees.  To make the case, co-op management should point out upcoming retirements, recent past retirements, past sudden employee departures, difficulties with staffing, and new challenges on the horizon for the co-op that require a robust pool of talent.  As noted above, building trust and ensuring transparency are keys to success here.  If you choose to work with GreatCo-Ops on your succession planning process, we will provide communications for you to use in selling this important process to the board, senior staff, and employees.

Step 2:  Identify Parties Accountable for Succession Planning

The cooperative must determine who is primarily responsible for identifying and developing the next generation of mission-critical leaders.  For some cooperatives, this responsibility might rest with the CEO.  For other co-ops, it might best be delegated to HR or the vice presidents.  For very large cooperatives, responsibility may be placed upon the VPs, as well as one or more layers within the chain of command below them.  This is clearly a decision that should be made after thoughtful discussion among the senior leadership of the cooperative, as there is no one-size-fits-all approach that works best.  The key to success and sustainability of the process, however, is clear – someone must be charged with accountability for the program.

Step 3:  Determine Future Mission-critical Roles Across the Cooperative

This step begins with a solid understanding of the co-op’s strategic plan and the future challenges the co-op and the industry will face.  Armed with this knowledge, co-op leadership will then determine the mission-critical roles of the future.  Of course, this requires co-op leaders to define what is meant by “future.”  We recommend a window of approximately five years for Strategic Succession Planning.  

This step of the process is best accomplished through a facilitated group meeting.

Most of the co-op’s current mission-critical roles will also be mission-critical in that five-year time period.  However, new mission-critical roles may emerge that do not currently exist at some co-ops.  (Senior positions in cybersecurity, data analytics, and storage technologies come to mind.)  It is important to develop plans for both categories of roles – current ones and likely future ones.

Strategic Succession Planning does not mean simply preparing to fill current roles at a future time period. It also includes identifying future, new mission-critical roles and preparing to fill them when the time is right, either with current employees you will develop or new talent from outside the co-op.

Each cooperative will need to determine what its mission-critical roles will be in the future.  There are obvious ones, like the CEO and the positions that report to the CEO.  How deeply into the organization a cooperative should go with succession planning is ultimately up to the discretion of cooperative leadership.  Our recommendation is to be more inclusive rather than less.

Step 4:  Determine Key Success Factors for Each Mission-critical Role

For each role identified as mission-critical, the cooperative should determine the Key Success Factors (KSFs) required for excellent performance, as well as how to evaluate a person’s fit with each of those factors.  We encourage co-ops to have an established set of expectations regarding behaviors and attitudes for everyone who holds a mission-critical role.  (These may include dependability, integrity, transparency, team orientation, etc.)  Beyond these, each mission-critical role will have its own set of required knowledge and skills that must be well articulated so that likely successors can be developed to fit the needs of the roles.

It is important to note that the determination of future mission-critical roles and the KSFs for those roles should be made collaboratively among the appropriate levels of staff/employees at the cooperative. The senior staff should meet as a group for a facilitated discussion about their roles, how those roles interact and are evolving, what those roles will look like in the future, and the KSFs for those roles in the future.

Each senior staff member should develop their thoughts on their own position and present it formally to the rest of the team for their input and deliberation.  This collaborative approach to mission-critical role identification and KSF specification will help all senior staff members better understand the future needs of their own role and how their role will affect others’ roles in the future.  In advance of such a facilitated meeting, staff should individually review their written job descriptions and develop the list of KSFs for their role so they can share them with the group to stimulate discussion.  If written job descriptions do not exist, they should be developed in advance.

A similar approach should be taken for other positions at lower levels in the cooperative as appropriate for the co-op’s context and succession planning objectives.

Step 5:  Select Employees for Inclusion in the Process

Every organization approaches this step of the process somewhat differently, and there is no single-best approach.  The goal in Strategic Succession Planning is to identify future mission-critical roles and ensure that the cooperative has individuals prepared to fill those roles when necessary.  Thus, the cooperative must identify employees to be considered for those roles, and that is sometimes difficult.  A survey asking employees about their professional goals is an ideal tool to get the insights co-op leaders need.  (Our succession planning toolkit includes survey items for this purpose.)

We recommend that co-ops allow employees to opt out of the succession process and make it clear that such a decision is appropriate if it is aligned with the employee’s professional goals.  Not every employee wishes to move up the hierarchy or assume more challenging roles.  Some of a co-op’s MVPs are happy and highly successful in their current roles, and this should be celebrated.  We all go through different seasons in our professional life, and we should respect employees who elect out of consideration for new roles.  (Of course, we should also be sure to check back with them at appropriate intervals to gauge their current/evolving preferences.)  Management should let them know that the cooperative will continue to invest in them regardless so that they have the skills and tools required to succeed at their jobs.  Everything possible should be done to ensure that there is no stigma attached to those who do not wish to be considered for the succession planning process or who were not ultimately selected by management for inclusion. 

At the same time, the cooperative should cast a wide net, so to speak, so that everyone with aspirations is afforded the opportunity to at least be considered for the succession plan.  As a starting place, the cooperative should ask each employee to answer questions about their career goals so that those charged with the Strategic Succession Plan can more easily narrow down the list of possible candidates for inclusion.

We recommend that co-ops identify two to three succession candidates for each mission-critical role if possible, though we recognize that this is unlikely for many positions, especially at smaller, leaner co-ops.

Succession planning will necessitate some potentially difficult conversations with employees, as some who wish to be involved have not shown the behaviors and attitudes that will make them successful at more senior or more challenging positions.  Also, some employees will indicate that they would prefer a role in a different department (or even a different organization).  Co-ops should honor these disclosures by doing whatever possible to help the employees navigate into careers at the co-op or beyond that are the most interesting and meaningful to them, as well as the best use of their skills.  This will build employee engagement and commitment to the organization.

Those who indicate a desire in the employee survey to advance or take on more challenging roles are considered for inclusion in the Strategic Succession Planning process.  We encourage co-op management to be more, rather than less, inclusive in making their selections so that a greater number of employees are given the opportunity to develop their skills and increase their value to the cooperative.

Employees should be asked to evaluate themselves on their readiness for the future position in question, and their supervisor or someone else with expertise in the position in question – which we call the employee’s mentor – should do the same, using a well-designed Succession Readiness Form (SRF).  (Our succession planning toolkit includes our SRF template.)  The employee and mentor should meet to discuss their perspectives on the employee’s readiness, and they should collaborate to develop the employee’s Growth and Development Plan (see below) to help the employee become prepared should the opportunity arise to make a move.

Step 6:  Create and Implement Employee Growth & Development Plans (GDPs)

Next, employees who have been identified for participation in the succession plan should develop their GDPs to present to their mentor for review and discussion.  KSF gaps (instances where an employee’s knowledge, skills, behaviors, or attitudes do not meet the criteria for success in a given future role) should have been identified on the Succession Readiness Form, and the employee and his/her mentor should work together to find opportunities for the employee to close those gaps.  These opportunities should be clearly stated on the GDP.  (GDP templates are included in our succession planning toolkit available to our clients.)

The GDP should include development opportunities for employees in three categories as appropriate:

Experience – give employees opportunities to gain hands-on experience at tasks that are related directly to future KSFs for roles they are interested in filling

Exposure – give employees opportunities to shadow the person who currently holds the role they are interested in filling

Training & Education – give employees time and budget to pursue the training and education required for the role they are interested in filling

Employees and their mentors should meet on a regular basis (we recommend quarterly or twice annually in most cases) to discuss progress.  At least annually, the employee and mentor should update the GDP and revisit the SRF to ensure continued relevance and accuracy.

Step 7:  Revisiting Future Mission-critical Roles Across the Cooperative

Approximately every two to three years, co-op leadership should carefully reexamine the likely mission-critical roles five years down the road and update the succession planning process as required.  Most likely, the modifications will be minor, and this step of the process will be simple.  However, succession planning is never complete.  It must be ongoing to assure that there is a pool of talent ready, willing, and able to continue leading long into the future.

Getting Started

Co-op boards and management teams across the nation are aware of the growing importance of achieving excellence in succession planning.  Unfortunately, many have hesitated in getting started because they lack the time and a well-defined structure for the process.  The team at GreatCo-Ops is here to help.  We have the expertise and the process to make this a success for your cooperative.  

We encourage you to take the first step toward getting started by contacting us for a conversation about how we might work together on succession planning for your co-op.