Daystar University

Assignment in partial fulfillment of the course

Submitted By: Hannah Maleche

Submitted to: Dr. Dinah Keino

Date: 21st March 2023

Daystar University
Nairobi Campus
Table of Contents
Succession Planning at IBM ........................................................................................................... 1
IBM's Succession Planning Strategy .......................................................................................... 1
IBM's Succession Planning and its Impact on the Company's Success ...................................... 2
Dilemmas & Failures in Succession Planning ............................................................................ 2
Conclusion .................................................................................................................................. 4
Human Resource Management ....................................................................................................... 5
Attracting and Retaining Top Talent .......................................................................................... 5
Developing a Culture of Innovation ........................................................................................... 5
Embracing Diversity and Inclusion ............................................................................................ 6
Investing in Employee Development .......................................................................................... 6
Conclusion .................................................................................................................................. 7
References ....................................................................................................................................... 8
Succession Planning at IBM
Succession planning refers to the process of identifying and developing potential future leaders or

senior managers in an organization. It aims to ensure leadership continuity in key positions and

enable a smooth transition of responsibilities to the next generation of leaders. However,

succession planning is fraught with challenges and often fails to achieve its objectives.

International Business Machines Corporation (IBM) is a multinational technology company that

specializes in computer hardware, middleware, and software. The company has been in existence

since 1917—over a decade—and has been able to maintain its position as a leader in the technology

industry. (Potter, 2012) One of the factors that have contributed to the company's success is a well-

defined succession planning strategy. This essay will discuss IBM's succession planning strategy

and its impact on the company's success.

IBM's Succession Planning Strategy

IBM has a well-defined succession planning strategy that ensures the company has a pool of

talented and skilled employees who can fill key leadership roles when they become available. The

company has a formal process that identifies employees who have the potential to take on

leadership roles in the future. The process involves identifying the key competencies required for

each leadership role and assessing employees against these competencies. This process is not only

limited to the growth of employees for leadership roles, but includes growth for employees in

every aspect of their jobs and lives at IBM. (Boudreau, 2010) Once the potential leaders have been

identified, the company provides them with the necessary training and development opportunities

to prepare them for the roles. This includes on-the-job training, mentoring, coaching, and

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leadership development programs. The company also ensures that the potential leaders have

exposure to different parts of the organization so that they can develop a broad understanding of

the business. (Schroeder, 2021)

IBM's succession planning strategy is not limited to the top leadership positions but covers all

levels of the organization. The company recognizes that leadership is not restricted to the C-suite

but can be found at all levels of the organization. (Schroeder, 2021) The company has a culture of

developing its employees and providing them with opportunities for growth and development.

IBM's Succession Planning and its Impact on the Company's Success

IBM's succession planning strategy has played a significant role in the company's success. The

company has been able to maintain a strong leadership pipeline, which has ensured that there is

continuity in leadership even when key leaders leave the company. This has reduced the impact of

leadership turnover on the company's operations and has contributed to the company's stability.

The company's succession planning strategy has also ensured that the company is innovative and

adaptable to change. The company has been able to identify and develop leaders who have the

skills and knowledge required to drive innovation and change. This has enabled the company to

remain competitive in the rapidly changing technology industry.

Dilemmas & Failures in Succession Planning

The aim of succession planning is to ensure leadership continuity in key positions and enable a

smooth transition of responsibilities to the next generation of leaders. However, succession

planning is fraught with challenges and often fails to achieve its objectives. Over the many years,

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IBM has successfully planned and designed its succession plan to the extent that they have been

able to avoid some common failures that other less established companies face while making its

succession plan. Some of the common dilemmas and failures that they have been able to avoid

include, a lack of buy-in from leaders; failure to identify high-potential candidates; lack of

development; lack of transparency; and insufficient evaluation.

Lack of buy-in from leaders and managers: IBM successfully navigated this issue by making

including their Human Resource Management in top-level decision making. They have managed

to do this at a global level by having some of its HR executives support regions directly by acting

as "business unit HR leaders," supporting their unique HR requirements. (Boudreau, 2010)

Failure to identify high-potential candidates: IBM has also been successful in identifying talent

within the organization. They have done this by providing equal career advancement opportunities

for their staff and deliberately having discussions on career advancement with each employee.

(Schroeder, 2021) This means that anyone who gets a job at IBM has the same opportunities to

advance to the highest level of the company.

Lack of development opportunities: After identifying high-potential candidates, they receive the

necessary mentoring, coaching, and developmental assignments to nurture their talent at IBM.

(Boudreau, 2010) This has translated with a motivated and committed workforce.

Lack of transparency: One of the first moves IBM made while constructing its succession plan

was making the process of succussion planning as transparent as possible. Its success in

transparency has been great to the extent that changes in top management have little to no effect

on the organization and occur seamlessly. IBM select their new CEOs based on merit and also

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consider internal applicants. This shows a comprehension of transparency that supports and

enhances the strong corporate culture they already have in place. (Bersin, 2011)

Insufficient evaluation: IBM’s policy for succession planning provides equal career advancement

opportunities for their staff regardless of their department. (Schroeder, 2021) This means that

anyone who gets a job at IBM has the same opportunities to advance to the highest level of the

company. Leaders at IBM all have different pipelines or routes that they went through to their

roles. (Schroeder, 2021)

Conclusion

IBM's succession planning strategy has been a key factor in the company's success. The company's

commitment to developing its employees and providing them with opportunities for growth and

development has ensured that there is a strong leadership pipeline. This has reduced the impact of

leadership turnover on the company's operations and has contributed to the company's stability.

The company's succession planning strategy has also ensured that the company is innovative and

adaptable to change, which has enabled the company to remain competitive in the technology

industry.

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Human Resource Management
Fintech companies face severe competition from established financial institutions as well as recent

market entrants in the quickly evolving business environment of today. Fintech companies must

use their human resource management strategies to get a competitive edge in order to succeed in

this climate. This essay examines how employing effective HR practices might provide a fintech

business a competitive edge in the twenty-first century.

Attracting and Retaining Top Talent

Attracting and keeping great personnel is one of the most important components in giving the

fintech company a competitive advantage. By creating an employer brand that appeals to the top

prospects on the market, human resource management will play an essential part in this process.

Its employer brand comprises fostering a positive work environment, providing rewarding

compensation plans, enabling chances for career advancement, and encouraging work-life balance.

According to a report by IBM and WorkHuman, "…organizations providing a positive employee

experience outperform their cohorts three-fold for ROA and two-fold for ROS..." (IBM Smarter

Workforce Institute & Work Human: Analytics & Research Institute, 2018) Fintech companies

that invest in their employees' development and well-being will attract and retain top talent, which

is critical for their success.

Developing a Culture of Innovation

Innovation is at the heart of a fintech company. Human resource management can foster a culture

of innovation by promoting creativity, risk-taking, and experimentation. This can be achieved by

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creating cross-functional teams, encouraging collaboration, and providing resources for research

and development. For example, PayPal, a company that offers similar service, has a "Global

Innovation Tournament" program where employees can work on their own projects and

experiment with new ideas. The fintech company can stay ahead of the curve and provide cutting-

edge goods and services by cultivating an inventive culture. This is especially crucial in the fintech

sector, where technology developments are rapidly changing the market.

Embracing Diversity and Inclusion

In order for the fintech company to gain a competitive edge in the twenty-first century, diversity

and inclusion are crucial. By putting diversity and inclusion programs into place, human resource

management may make sure that the company's personnel matches the diversity of its consumers.

This entails giving all workers the same chances, encouraging diversity in hiring, and cultivating

a culture that values diversity. According to a study by McKinsey & Company, "Companies in the

top quartile for gender diversity on executive teams were 21 percent more likely to outperform on

profitability and 27 percent more likely to have superior value creation." (Hunt et al., 2018) By

embracing diversity and inclusion, fintech companies can create a competitive advantage by

understanding the needs of a diverse customer base and creating products and services that meet

those needs.

Investing in Employee Development

The fintech business is one that moves quickly and is always changing. Employees must therefore

possess the knowledge and skills needed to stay up with the developments. Human resource

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management may support employee growth by offering workshops, training sessions, and

mentorship opportunities. This not only shows the company's dedication to its employees'

professional development but also guarantees that workers have the knowledge and skills they

need to thrive. Employee engagement and commitment to the company's success are therefore

more likely.

Conclusion

In conclusion, employing effective human resource management techniques can help a fintech

business establish a competitive edge in the twenty-first century. Fintech businesses can set

themselves apart from their rivals and stay on top of the game by enticing and keeping great

personnel, creating an innovative culture, supporting diversity and inclusion, and investing in

employee development. Human resource management will become more crucial to the success of

fintech companies as they continue to upend the conventional banking industry.

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References
Bersin, J. (2011, October 26). Succession Management at IBM, Contrasted with Apple and HP.

JOSH BERSIN. https://joshbersin.com/2011/10/succession-management-at-ibm-

contrasted-with-apple-and-hp/

Boudreau, J. (2010). IBM’s Global Talent Management Strategy: The Vision of the Globally

Integrated Enterprise. Society for Human Resource Management.

https://www.shrm.org/certification/educators/Documents/Boudreau_Modify%20IBM%2

0Case%20Study_PDF%20Only-CS5-partC-FINAL%20TO%20POST.pdf.

Hunt, V., Prince, S., Dixon-Fyle, S., & Yee, L. (2018). Delivering through Diversity. McKinsey

& Company. http://www.insurance.ca.gov/diversity/41-

ISDGBD/GBDExternal/upload/McKinseyDeliverDiv201801-2.pdf

IBM Smarter Workforce Institute, & Work Human: Analytics & Research Institute. (2018). The

Financial Impact of a Positive Employee Experience (pp. 1–8). IBM Smarter Workforce

Institute. https://www.ibm.com/downloads/cas/XEY1K26O

Potter, J. (2012, January 9). International Business Machines Corporation (IBM) | The Canadian

Encyclopedia [Encylopedia]. The Candadian Encylopedia.

https://www.thecanadianencyclopedia.ca/en/article/international-business-machines-

corporation-ibm

Schroeder, H. (2021, July 26). Smooth Succession: How IBM Set Records in the Realm of CEO

Transition. SIGMA Assessment Systems. https://www.sigmaassessmentsystems.com/ibm-

succession/