The Strategic Value of Succession Planning
In an ever-changing insurance landscape and with an evolving customer base, Aflac Inc. makes it a priority to have an agile, diverse, and stable leadership team. We also recognize that critical corporate functions, such as accounting, are crucial to delivering value for our shareholders and policyholders. As such, change and transition could present barriers.
Upon joining Aflac in 2009, I knew we had a top-performing accounting team, but we needed to build out our department to prepare for future growth of the organization and to accommodate inevitable changes due to retirements and departures. This process took time, but it has enabled us to cultivate talent and become a more strategic organization.
Without question, all departments in all businesses need to have a succession plan ensuring critical operations can continue to deliver results and allow innovation to flourish as the team changes. However, planning ahead is more than ensuring resources will be available when they are needed; it's also a way to add value in both the long and short term.
Plan Ahead for Long-Term Success
In less than five years, one-quarter (25 percent) of the US workforce will be age 55 or older, leaving businesses across the board faced with potential leadership gaps, often at the most senior levels. After being appointed to my role at Aflac, one of my immediate priorities was to face this challenge head on, and this has proved integral to our department's success.
We began with an evaluation and then set out to build a strategy for the future that would ensure continuity and enable long-term growth. For businesses that do not currently have a succession plan, the time to course-correct is now, beginning with an evaluation of potential gaps and a rapid response to the most immediate challenges at hand. As leaders retire, leave Aflac, or change roles, our financial operations will need to continue as usual during the transition to new leadership. While the ideal situation is to have a âstand readyâ successor prepared for each leadership role, one is not always available, and as a result, we must be creative. When our team has encountered this situation, we have worked to identify a âlights onâ person who understands the priorities and knows how to move things forward until a succession plan is finalized.
When individuals retire or leave Aflac, numbers are not the only thing affected, and leaders must see beyond headcount as they work to identify potential team members. When reviewing our organizational chart and planning for succession, we consider individual team members' unique skills and backgrounds, and we work to compensate for lost diversity in these areas. Our aim is not only to locate and recruit team members with the required credentials, but also to bring in and maintain a wide range of skills and expertise.
As a succession plan takes shape, it should shift from a reactive response to needs to a proactive map for growth. Smart leaders will prepare now for the opportunities and challenges down the road, thinking beyond the next round of annual reviews and performance evaluations. Within my team, we develop three-deep succession plans to accommodate the ripple effects of staff changes. Having a steady plan in place for the whole team, instead of just a single position, ensures we maintain stability and complete a smooth transition. Each year, I gather my team to reassess our succession roadmap, taking the opportunity to review our needs, identify gaps, and find ways to address them.
Develop Your Team and Highlight Potential
Teams depend on capable leaders. A succession plan only brings value if those waiting in the wings are fully prepared to take on the requisite challenges of a new role. Most organizations contain a wealth of talent, but not every person is ready to move up immediately. Working to develop your team in advance of future succession will equip individuals for new responsibility and demonstrate a commitment to joint success.
At Aflac, we leverage leadership coaches to help prepare our team for roles to come, enabling them to cultivate the skills they will need as they rise through our organization. In addition to the benefits this brings down the road, it also generates an immediate boost in capabilities and morale. Employees appreciate seeing the company invest in them and, in turn, are more engaged and committed to success. Similarly, we encourage our team members to reach beyond their expectations of themselves and seek out leadership roles.
A large portion of Aflac's business is in Japan, where there are still few women working in finance and even fewer in leadership positions. As part of our All Aflac initiative, I join other company leaders overseas multiple times per year in working to build bridges and encouraging our local team to further support women colleagues in reaching their potential and ascending the ranks.
Anticipate What's Next
As the accounting industry continues to evolve, businesses need to keep up with trends and government regulations in order to effectively deliver against business goals. Our accounting organization is currently redefining our financial planning and analysis function, requiring us to identify a new team equipped with new skill sets and a new way of thinking. Staying current with evolving industry standards helps our department keep pace with change and leaves us better prepared for future challenges.
With time, business objectives may also shift, and new needs and goals may emerge. Aflac has always prioritized its customers, and as technology advances, we will continue to find new ways to improve our customer experience.
In the United States, we recently made a major change to our sales structure in order to better align performance and compensation. This required an update to many of our internal processes, as well as our team structure, to meet the needs of one of our most important internal clients â sales. By building agile and adaptable plans, our organization is able to pivot and support business needs as they evolve, providing strategic value across the board.
Succession planning is a priority because the future success of our organization depends on it. We have a world-class team in place, one that represents the leadership and diversity in skills needed to continue to deliver against our objectives: providing leading services to our customers and value to our shareholders.
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June Howard, CPA, CFA, CGMA, is senior vice president of financial services and chief accounting officer for Aflac Inc. She is responsible for consolidated accounting and financial reporting, strategic sourcing and procurement, investment accounting, tax, accounting policy, and financial planning and analysis.