Talent and Succession Management Strategy

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Table of Contents

Executive Summary
Introduction and Background of BP Company
Literature Review
Discussion
Conclusion and Recommendations
List of References

Executive Summary

Succession planning strategies have become very important in the current competitive market. There has been a shift of focus in succession planning strategies. Initially, it was a method meant to select the most appropriate chief executives. However, firms currently use it as an approach of selecting the most qualified candidates for various positions. At BP, the management has been keen on its selection of individuals to hold various posts within the firm.

The focus has been to select candidates with appropriate skills to these positions. However, the current strategy has not been effective enough in identifying and nurturing talents among its employees. This has affected its efficiency. The management must therefore, consider refocusing its strategy to be comprehensive enough to capture special talents among its workforce, and determine the approach of using the talents in its management strategies.

Introduction and Background of BP Company

Introduction

The current business world is becoming very competitive, especially due to the increasing number of firms competing for the same market. According to Rothwell (2010, p. 112), business units must find ways of managing this competition if they expect to succeed in protecting their market shares.

In such a competitive environment, marketing plays an important role in enabling firms to understand the needs of their consumers, produce goods that meet their needs, and deliver this product in a way that would yield maximum value to them. This way, a firm would be able to attract and retain a large pool of loyal customers. According to Hawkey (2002, p. 35), marketing has gained a lot of relevance in the near past.

There has been a shift of focus from the 19^th century’s emphasis on production strategy, to the 21^st century’s focus on social marketing. In those early years, competition was almost nonexistence. Firms’ main concern was to present their products to the market. Consumers lacked alternatives, and therefore, they would be forced to buy what was presented in the market.

This changed as we approached the 20^th century. In the current market, the competition is so stiff that firms have to employ marketing strategies in order to remain competitive. For this to happen, Olsen (2013, p. 89), says that a firm must have a pool of talent among its employees at managerial levels. It must have the right people who are competent enough to take it to the next level in terms of creativity and innovativeness.

Succession planning strategy has therefore, been considered very important in the current business environment as a way of identifying and nurturing talents. Succession planning in the current business environment goes beyond selection of top management officers. It also involves having the right workforce at various sensitive positions within the firm.

According to Liteman (2003, p. 78), for a firm to be able to take maximum advantage in the marketing strategies, there is a need to have a skilled and talented workforce that has the capacity to manage the changing environmental forces. Skilled labor is major assets that can enable a firm survive negative environmental forces in cases where other competitors failed. Talent is core in enhancing creativity and innovation within a firm.

Firms may find it challenging to identify some of the relevant talents that can help them move a step further towards success. It requires the management to develop strategies that would help them identify and nature talents among its workforce as a way of gaining relevance in the market.

BP is one of the leading oil companies in the world. It has gained a reputation in the market because of the competence of its successive leaders. This would make one believe that succession-planning strategies at this firm is effective. It would be important to capture some of the background information about this firm.

Background of BP

BP, also known as British Petroleum, is a large British oil company that was started in 1908. A group of geologists, led by William Knox was commissioned to conduct an exploration of oil in Iran, and their exploration proved successful. When the geologists confirmed that there were rich oil reserves in Iran, they quickly developed Anglo-Persia Oil Company as Burmah Oil Company’s subsidiary.

When the British government realized the potential of the oil reserves in Iran, it moved with speed to take a leading shareholding in this new company in order to control its operations. At this time, tension had started developing in Europe, and countries were preparing themselves for war. The firm experienced massive expansion during the First World War. During this time, oil had become an important commodity in the industrial sector.

The firm received another major boost in the Second Word War as it played a major role in providing fuel both to the industrial sector and to the military during the war.

It expanded vary rapidly through mergers and takeovers. It has also formed strategic alliances with some of the leading oil and gas companies such as the Royal Dutch Shell and the Russian TNK to improve its global market coverage. The early success of this firm was attributed to its effective leadership. Top management of this firm remained focus on the market forces, and this helped it grow rapidly.

According to Randhawa (2007, p. 82), BP currently operates in over 80 countries across the world, with over 20,800 service station. It has taken a vertical operational approach, which means that it is involved in oil exploration, production, refining, marketing, and distribution of petroleum products. It is also involved in power generation, petrochemicals, renewable energy, wind power, and biofuels.

This diversity is a clear sign that this firm has had the right workforce at the management and other levels within the firm. Based on its revenues in 2012, the firm was ranked the world’s fifth largest company. Although BP has been very successful in the market, it has met some challenges that have affected its operations in the market. The world is increasingly getting concerned with issues of environmental protection.

However, BP has scored poorly in its environmental protection strategies. The firm has been subject to a series of litigations due to failure to manage its plants or other petroleum facilities. In 2005, its Texas Refinery Plant exploded, causing death of its 15 workers. It was fined millions of dollars because of this accident. In 2006, Prudhoe Bay oil spillage that spread to North Slope in Alaska earned it $ 25 million for lack of its ability to protect the environment.

The Deep-water Horizon remains the largest oil spillage in the history of this industry. This has not only earned this company serious loss in terms of billions of dollars in fines, but has also tainted its image in the market. In a business environment that has become increasingly sensitive on environmental protection, BP has lost its glorious image to some of its competitors, especially in United States.

The recent unfortunate accidents clearly demonstrates that BP need to identify better talents that would enable it achieve efficiency in its operations. It is a sign that its current succession planning strategies are not effective enough to identify the most appropriate talents for various sectors within the firm. Its diversification into renewable energy is a sign that the management has been effective enough to tap on new talents that can bring new ideas to the firm.

However, the series of accidents that have taken place in the last one-decade resulting in deaths and huge sums of money being paid as fines is a clear warning that the current strategy is not successful enough to identify the most appropriate talents for its operations. According to Goad (2004, p. 78), the Deep-waters Horizon oil spillage was because of incompetent engineers at this firm who underestimated the pressure and the reaction at the exploration site.

This resulted into massive loss to this firm and damage of its reputation in the market. Reactive strategies are no longer appropriate in the market. The firm cannot wait for such unfortunate incidences to occur in order to initiate a reaction. It must have a proactive team that has the capacity of understanding the changing technological factors and determine how the firm can operate within these factors.

The fact that this firm has been on record for polluting the environment over the last decade demonstrates that there is a gap in the current talents that are within this firm. The current workforce lack special talent that can enable them understand the instruments used in the exploration, production, transportation, and storage of petroleum products. It is a clear indication that something must be done to rescue BP from any possible accidents that may hurt its operations further.

Objectives of the research

Sobol (2007, p. 79) notes that research is a very complex and expensive process that must be conducted with a clear purpose to be met. Stating the objectives helps the researcher in identifying facts that should be collected from both the primary and secondary data sources. As stated in the introduction, energy sector is the backbone of other sectors of the economy in any given country.

Therefore, this important sector must be treated with a lot of care in order to achieve maximum benefit from it. With the current prevailing external environmental factors, firms are under great pressure to find ways of operating at their best in order to remain competitive. Efficiency, effectiveness, and innovativeness are key to achieving the desired success in the market. These factors concern the capacity of human resource. This means that the management and employees at various levels must have the right skills and talents.

Talent has been considered a core value that enables firms to be creative in their operations. BP must find a strategy of identifying and nurturing talents among its top management and other junior employees for it to be successful in the market. Its succession planning strategies must be effective enough to identify employees who have the best capacity of undertaking various activities within the firm. The following are some of the specific objectives that this research seeks to achieve.

To understand the succession planning strategies that BP has been using to identify the most qualified individuals for its top leadership.
To determine the current strategies that are used at BP to identify and nature talent among its employees
To determine the level of talent that has been natured at BP using its current strategies.
To determine how the current talents at BP has given it a unique market advantage over its competitors.
To identify some of the gaps in the current succession planning strategies that makes it less effective in identifying and nurturing talents among its employees.
To develop a strategy that would be most appropriate for this firm in identifying and nurturing of talents for its top leadership and junior employees.

The researcher seeks to meet the above objectives in an effort to give a report that will make BP a better and more competitive firm in the sectors where it operates.

Literature Review

According to Goad (2004, p. 56), employees are the most important assets that any organization can have. Success of a firm depends on the quality of the employees, especially at the top management. It is becoming apparent that firms’ competitiveness in the market would directly depend on the quality of workforce it has.

Successful firms in the market are creative and innovative. They develop products that are unique, giving their firms opportunities of taping into new markets that are yet to be flooded. In the energy sector, the stakes are even higher, especially due to the increasing concern for the environment.

Firms in this sector must come up with ways in which they can make their productions in the way that is very safe to the environment. This means that these firms must have appropriate leadership and workforce that will be able to bring innovation in their respective areas of operations.

Succession planning strategy has been considered very crucial for firms as a way of identifying talents and skilled workforce with the capacity of understanding the prevailing market forces. According to Sims (2007, p. 92), although many people view succession planning as a relatively new approach of selection of employees and top managers, it has been in existence for a very long time. Firms are faced with the challenge of redefining themselves beyond their current operations.

Randhawa (2007, p. 30) notes that firms are still struggling to find the best employees who can handle various duties effectively. Although a few have developed succession planning strategies that enables them to identify, develop, and retain special talents among their employees, most firms still lack such programs.

According to Jackson (2011, p. 90), firms have failed to develop strategies that can enable them identify the most appropriate workforce, retain them because of their skills, and help them develop their career even further. Randhawa (2007, p. 94) notes that although BP is one of the best employers in various countries around the world, it has experienced a relatively high employee-turnover within the past one decade. What makes this situation even more unfortunate is that some of these employees are hired at rival firms.

They transfer all their skills and experience to these rival firms, giving them a better chance of beating BP. This is attributed to lack of clear strategies that can be used by the firm to identify and retain the most qualified employees to boost its operations.

According to Goad (2004, p. 71), succession planning is taking a completely new dimension in the current competitive business world. Firms are forced to go a step higher in their operational strategies in order to achieve success. The market is experiencing changes, and firms must adopt these changes in order to remain competitive in the market. In the energy sector, there has been a strong shift of focus from the use of petroleum products, to bio-safety products.

Companies in the energy sector are forced to shift their focus into environmental friendly fuels. To achieve this, there is need to have a management unit and a workforce that understand the environmental dynamics.

Succession planning strategies therefore helps in identifying and nurturing special talents within the firm that can enable it manage the dynamic market environment. BP Company is one of the leading energy firms in the world. Its ability to remain competitive in the market largely relies on its human resource management strategies.

Discussion

Current human resource development strategies at BP

BP has come to appreciate the importance of having highly qualified human resource at various levels of management. The firm has developed strategies, which are geared towards helping it develop its current workforce to increase their capacity in handling various activities within the firm.

The management has developed in-service training programs for its employees, which is meant to instil knowledge on them on the current issues, especially changes brought about by the emerging technologies.

These learning programs have been developed to not only target junior employees who are at operational levels in this firm, but also leaders in the senior management positions. This has yielded positive fruits for this firm. According to Dahlke (2012, p. 95), BP has been able to adopt the emerging technologies within the past one decade at a relatively faster rate than before.

Performance management

Employees form one of the strongest pillars within an organization that will always determine the capacity of a firm to be successful in the market. The performance of employees depends on a number of factors. As Atwood (2007, p. 89) notes, one of the important factors that would determine the performance of employee is their level of competence. Different tasks within this organization require different skills that employees should have.

Having a workforce with the right skills would always determine the success levels that can be achieved within the firm. BP needs technocrats, besides the qualified management unit. In each category, there must be a way of selecting the best-qualified candidates. The status of this firm shows that the management has made an effort to recruit the most appropriate candidates for various sectors.

Performance management involves close monitoring and coordinating of employees’ performance with a view of optimizing it in order to increase its performance. At BP, the management has set structures meant to monitor activities of employees per department, and ways in which this performance can be enhanced.

The firm has been promoting teamwork, a scenario where employees form small workgroups with the aim of achieving specific objectives within a short time span. This way, it becomes possible to break down strategic objectives into short-term goals, and to determine how these goals can be realized in the best way possible in order to make the firm achieve its strategic objectives.

Talent identification

Succession planning has increasingly become important in the current market because of the increasing levels of competition. According to Rothwell (2005, p. 38), the market competition has gotten so stiff that it forces firms to develop new approaches of remaining competitive. Identification and nurturing of talents has become very important in nurturing employees to assume various leadership position.

Firms require people who have learnt skills in various fields with the capacity to make the firm achieve success in its operations. However, it is important to note that these skills are commonly found in other competing firms. For this reason, firms need more than just skills in employees. They need a workforce and a management unit that have the capacity to come up with something that is beyond the market expectation.

They need a workforce that is innovative enough to come up with new ways of running various activities. They need talent in leadership. At BP, the management has programs running to help nurture creativity and innovations among its workforce. The program creates an environment where people with creative minds are given opportunity to transfer their creativity into practical actions within the firm. However, it is important to note that the current structures at this firm leave some gap.

For instance, the programs do not focus on how the firm can identify these talents even in cases where employees are reluctant to demonstrate that they have special skills. The current system has been more focused on how to identify skills other than talents. Skills are important for efficiency, while talent is core to having innovative workforce. This firm must develop new approaches of identifying talents as proposed in the recommendations below.

Talent assessment

In succession planning strategies, Fager (2007, p. 57) says that a firm should have a clear mechanism of assessing talents whenever there is need to hire individuals at the managerial positions. Talent assessment involves identifying the level in which the identified talents are relevant to the organization. As stated above, the strategies used by BP in managing its human resource is more effective in identification of skills other than talents.

However, the system has been very effective in developing skills and talents that have been identified among its employees. The firm has large laboratory equipment in the United Kingdom and in the United States. At these facilities, the management would offer its workforce opportunity to test their newly developed skills.

This has helped the firm come up with a group of employees who understand the changing environmental factors. The management has been proactive in its talent and skills assessment strategies. The firm has been developing strategies meant to encourage creativity in its workforce.

Career development

According to Singer (2010, p. 135), having career development programs within a firm helps in nurturing employees and improving their performance which helps in improving its overall performance. At BP, there is an elaborate career development program meant to enhance the performance of the workforce and improve their workplace experience. In order to motivate employees, it is always important to create an environment where they feel that they can enhance their career paths.

BP has perfected this strategy. At this firm, employees are given perfect opportunity to develop their careers in various fields. The firm has in-service training programs, which are meant to enhance the capacity of its employees. The firm has also developed scholarship programs for its employees who are intending to further their education in different fields.

Employees are also offered promotional opportunities based on their performance record at the firm, and their loyalty demonstrated after a given period. This has seen employees make concerted effort to improve their performance and loyalty to the firm because they are well aware that such efforts will always be rewarded.

Most of the senior managers of BP are employees who have been with this firm for very long time, starting their careers as junior employees and earning promotions based on their commitment to the firm. This makes other employees feel that they have a better future with the firm in case they can remain committed to it, and enhance their performance.

Conclusion and Recommendations

Conclusion

It is clear from the discussion above that succession-planning strategies are very important in enabling a firm to be competitively unique in the market. Technological advancements have brought common ways of approaching various operational activities within the firm. Firms within the same industry would have similar tools and equipment for their operational activities based on technological inventions.

This means that a firm cannot rely on some of these universal tools to gain competitive advantage in the Market. BP has come to realize this fact. Some of its major competitors in the market can easily access most of the sophisticated tools it uses in its production strategies.

For this reason, the only way of achieving success in the market is through development of a unique workforce. To do this, succession planning is very important for this firm in identifying special skills and talents among its employees. The current succession planning strategies at BP have been effective in nurturing talents.

This has helped the firm to achieve success in the market. However, the discussion above shows that there is still a gap in this strategy, a fact that has denied BP an opportunity develop new ways of improving efficiency at various plants, especially in the North American regions. It would therefore, be necessary for the firm to consider the following recommendations.

Recommendations

In order to achieve maximum benefit in the market, the management of BP must realize that the current succession planning strategies are not optimally effective, and this could be the reason behind the recent series of accidents at some of its plants. This is a clear demonstration that the firm needs to identify more qualified and talented workforce, and skilled managers who understand the prevailing technological changes to help it operate efficiently. The management should consider the following.

Succession planning strategies should not just be focused on the top management of the firm. Every individual within the firm is a candidate for promotion to a higher rank. Before they can be promoted to those higher, ranks, adequate training is important to ensure that they can manage new responsibilities.
Succession planning is not one session event that should only be undertaken when it is confirmed that there is need for promotion. Rather, the management of BP should consider it a continuous training process meant to impart desirable skills on employees to enable them handle future responsibilities.
Firms are currently using technology in their succession planning strategies in order to ensure that the most qualified candidates are picked for various promotional opportunities. BP should consider using this approach to enhance its performance.

List of References

Atwood, C 2007, Succession planning basics, ASTD Press, Alexandria.

Dahlke, A 2012, Business succession planning for dummies, John Wiley & Sons, Hoboken.

Fager, M 2007, Succession planning for the family owned business: A blueprint for the future, Sub-Scribe Literary Services, Madison.

Goad, D 2004, Succession planning strategies for the financial planner: A complete resource guide, FPA Press, Denver.

Hawkey, J 2002, Exit strategy planning: Grooming your business for sale or succession. Gower Publishers, Aldershot.

Jackson, S 2011, Managing human resources, South-Western, Mason.

Liteman, M 2003, Planning for succession: A toolkit for board members and staff of nonprofit arts organizations, Cengage, New York.

Olsen, E 2013, Strategic planning for dummies, John Wiley & Sons, Hoboken.

Randhawa, G 2007, Human resource management, Atlantic Publishers & Distributors, New Delhi.

Rothwell, D 2005, Career planning and succession management: Developing your organization’s talent ; for today and tomorrow, Praeger Publishers, Westport.

Rothwell, W 2010, Effective Succession Planning: Ensuring Leadership Continuity and Building Talent from Within, AMACOM, New York.

Sims, R 2007, Human resource management: Contemporary issues, challenges and opportunities, Information Age Publishers, Greenwich.

Singer, P 2010, Succession planning in the library: Developing leaders, managing change, American Library Association, Chicago.

Sobol, M 2007, Linkage Inc.’s Best practices for succession planning: Case studies, research, models, tools, Jossey-Bass, San Francisco.

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