Signs of key person risk
Do any of these statements sound familiar?
“It hasn’t been the same around here since he retired. People are starting to leave.”
“I don’t know what we’d do if she resigned. She’s the only one with the right skill set for the job.”
‘He left and took all his contacts and knowledge with him. It has really crippled us.”
These are all signs of potential key person risk.
Key person risk is when there is a high level of reliance on one or a small number of individuals because of the critical importance of their knowledge, skills, experience, relationships or even their personality to the success (or survival) of the organisation.
Who are key persons?
Often when we think of a ‘key person’, we think of a CEO or other senior executives. However, this risk does not only apply to the C-suite.
It could also be a capable or charismatic middle manager that seems to be the rare individual able to motivate critical (but difficult to manage) business units to comply or get things done.
And then there is the technical expert. This is often a quiet achiever or the unsung hero whose support is invaluable in getting the right things done, in the right way.
The impact of key person risk
It’s great to have such people on board but the problem is when we place too much reliance on them to succeed or keep things running smoothly.
In addition to the impact on the organisation, it’s also important to recognise the impact on the individual in question. This does not only cause problems (such as business continuity issues) for the organisation but can also impact the individual’s professional development journey and their wellbeing.
They may be too loyal to move on even though they feel it’s time. Or their line manager may be holding them back to continue performing in a unique capacity.
They could also feel like they can’t take time off when they want or need to. Or they may have increased stress because the amount of pressure that is placed on them.
Tips for reducing key person risk
Managing key person risk can be slow and difficult. It is much easier to bury your head in the sand, and to continue to rely on the person, hoping for the best (i.e. that they will never leave or want more out of their career).
Sometimes it seems downright impossible because we think that such unique talent is absolutely necessary and irreplaceable.
Or maybe it’s difficult because maintaining the status quo is your way of keeping the person happy and making sure they stick around.
So with the above in mind, here are some things you can do to start reducing this risk, once you’ve identified the key persons or unique roles they fill in your organisation.
1. Avoid designing roles around an individual’s unique abilities.
It’s fine to tap into the role incumbent’s strengths but the role shouldn’t be about or dependent on their unique set of skills. Try to design the role so that someone else can take it on, even if they’re not a superstar. Design it around business need.
2. Ensure the organisation, and not the individual, is driving role design.
Often role incumbents, especially highly valued ones, are asked for input when a role is being formalised or redesigned. It’s OK to do this, however, make sure you are driving the process and not leaving it up to the individual to define the role. They will likely include what they’re good at and exclude what they’re not good at. They’re not being mean – it’s just human nature.
Involve others in the process to increase objectivity. This could be an external consultant with experience in organisational design or with expertise relevant to the role. It could also be an individual currently filling a similar role in another organisation or jurisdiction. The role’s stakeholders (such as clients or the line manager) should also be involved.
3. Increase role clarity.
Clarify the responsibilities the role involves, the key functions and how it interacts with others (the touch points). It should not be that the person mystically gets things done.
Make sure there is a job description and that it is clear what skills and qualifications are needed. Then make sure it’s not a perfect and unique description of this person. Go back to the business need and then ask yourself whether this is really what is needed to get the work done.
Splitting up essential and desirable skills can also help with this. Figure out the basics needed for the role and then what is needed to excel in the role but not essential.
4. Invest time and effort into retaining the relevant corporate knowledge, skills and relationships.
This can be done by having a standard practice of requiring work and decisions to be documented, placed on shared drives or in records management systems, backed up, etc.
Another way is to develop easily understandable written procedures or protocols of how things are done.
You could also get other people involved in what the person does. One option is to identify an understudy or potential successor that shadows them, attends meetings, is introduced to key stakeholders, trained on how to do the job, or acts in the role from time to time.
For key roles, you may want to have two understudies or divide the roles’ portfolio into two or three parts among two or three people. This is to address the issue that the understudies already have their day job to deal with, in addition to learning another one.
You could also ask the person to prepare a status update or handover notes before going on Christmas break or other types of longer leave.
5. Consider outsourcing options.
If it’s a specialised skill, see if there are external niche firms that could provide the service instead of or in addition to this person from time to time under a consulting or secondment arrangement.
This could also be a consideration for role design. Do you really need to build niche skills into a role or can external parties help out with this, who can afford to invest in the specialised training and continuous professional development required?
6. Focus on organisational culture.
Figure out what works in terms of talent attraction and retention in your context and prioritise those things. This will help in making sure your talent sticks around or that you are able to attract others of a similar calibre.
Also, while it’s good to celebrate individual’s achievements, maintain focus on the organisation’s success. Don’t build an organisation of superstars but rather of servant leaders or stewards that are contributing towards something that is greater than them.
7. Be practical and realistic.
Ask yourself whether you really need a superstar or whether a good performer can also get the work done.
Any thoughts?
Have you had success in reducing key person risk? If yes, what worked for you? Contact me and share your thoughts.
Thanks for taking the time to read the blog post.