Strategy to Improve and Manage the National Employee Succession Planning at Administration Department of Freeport Indonesia

In the current business environment, organizations equipped with well-defined succession planning have emerged as the most resilient amid change in leadership. The objective of this study is to improve and manage national employee leaders’ succession-planning in the Administration Department of Freeport, Indonesia. This study incorporates theories and research from William J. Rothwell on succession planning. Interviews were held to gather succession-planning improvement and management insights from five interviewees who represented each division’s top national leader inside the Administration Department. Grounded theory was applied to this qualitative research for data analysis. Grounded theory does not follow a straightforward sequence of data collection, analysis, and conclusions. Instead, it employs an iterative research methodology that involves repeated cycles through these phases. The study finds that all these leaders agreed to improve the existing Career Management policy even further to create a standalone succession-planning policy with a clear and detailed framework so that all employees are well informed of the process. Nevertheless, the degree of complexity in succession-planning and management differs, and implementation succession-planning in administration department suggested by this study consists of four phases: assessing organizational needs, developing a succession-planning policy, implementing a succession-planning framework, evaluation, and continuous improvement. 

Introduction

Freeport Indonesia (FI) and other firms around the world share common experiences. At some stages, organizations are compelled to address the transition of leadership. While a planned transition can be managed, the unpredictable nature of unforeseen change has the potential to disrupt an organization. Within this unstable environment, organizations need to lean on their key resources: employees–the workforce.

It is imperative for FI to develop strategies that will inspire and unify the workforce, with the aim of gaining a competitive advantage and realizing increased profitability. A well-managed, engaged, and skilled workforce has historically been a fundamental driver of productivity and safety in the mining industry; an unprecedented shortage of mining skills has thrust talent to the forefront of miners' agendas (Abenovet al., 2023).

In the past, succession-planning focused primarily on senior management. It aims to identify specific individuals, rather than skills and talents, required for the organization's future. The primary goal was to identify and label the successors necessary to take over specific roles from their predecessors. In this approach, the focus of succession-planning was on top leaders and business owners within large organizations.

In today’s competitive environment, where work conditions are constantly changing and organizations are becoming more streamlined and adaptable, succession-planning is being used across all employee levels. This is because organizations require a pool of talented individuals at every level. It is crucial to regularly assess and improve the tools used for tracking, mentoring, and training future leaders within an organization. This need arises as employees retire, find new opportunities elsewhere, are promoted from within, are terminated, or leave the organization for various reasons.

Freeport Indonesia (FI) Company Profile

FI is a mining company that operates in the Grasberg (GRS) mine. The GRS mineral district comprises copper, gold, and silver porphyry skarn deposits situated in the secluded highlands of the Sudirman Mountain Range in the province of Central Papua, Indonesia, which is located on the western half of the island of New Guinea. Active underground mines within the GRS mineral district include the Grasberg Block Caving (GBC), Deep Mill Level Zone (DMLZ), Big Gossan (BG), and Kucing Liar (KL), which commenced development in 2021. The GRS Open Pit halted production in 2019 and the Deep Ore Zone (DOZ) at the end of 2021.

The mines are in operation every day of the year, following a 24-hours schedule. Both mining and ore processing activities are currently underway, and the GRS mineral district is classified as a production stage property. Situated at latitude 4.08°south and longitude 137.12°east, the property utilizes the World Geodetic System 84 coordinate system as shown in Fig. 1.

Fig. 1. Property location map. Source: Freeport McMoRan 2022 Technical Report Summary.

FI is a company with limited liability established under the regulations of the Republic of Indonesia. On December 21, 2018, Freeport McMoRan (FCX) finalized an agreement with the Indonesian government concerning FI’s extended mining rights and stock ownership. As detailed in the (Freeport McMoRan 2023) Technical Report Summary, subsequent to the agreement, FCX holds a 48.76% stake in FI, while the remaining 51.24% ownership is collectively held by Mining Industry Indonesia (MIND ID), a state-owned enterprise in Indonesia, and PT Indonesia Papua Metal Dan Mineral (previously known as PT Indocopper Investama), which is expected to be owned by the MIND ID and provincial government in Central Papua Province, Indonesia. The terms associated with the agreements also stipulate that FCX and the other pre-transaction FI shareholders initially preserve the economic aspects of the revenue- and cost-sharing arrangements from the former unincorporated joint venture with Rio Tinto plc. As a result, FCX’s economic interest in FI was approximately 81% by 2022. Since January 1, 2023, FCX’s economic interest in FI matches its ownership interest at 48.76%.

The Indonesian government has awarded FI a new special mining license known as IUPK (Ijin Usaha Pertambangan Khusus–Special Mining Business Permit), which replaces its previous Contract of Work (COW) with the Government of Indonesia (GOI). This will allow the FI to carry out operations in the Grasberg mineral district until 2041. The IUPK detailed in Fig. 2. The IUPK grants FI an extension of mining rights through 2031, with the option to extend these rights further through 2041, if FI fulfills certain conditions. These conditions include the construction of additional domestic smelting capacity in Indonesia and meeting specific fiscal obligations to the Indonesian government. The terms and provisions of the IUPK, along with related documentation, will be legally binding until 2041. Failure to comply with the terms and conditions of the IUPK and relevant laws and regulations may result in non-extension of the permit by 2041.

Fig. 2. Freeport IUPK operational and support area. source: Freeport McMoRan 2022 Technical Report Summary.

Freeport Indonesia Manpower

FI conducts sustainable mining operations across the Timika Lowlands and the Tembagapura Highlands, prioritizing safety and security while simultaneously focusing on community empowerment and environmental conservation within the operational areas. The organization's overarching goal is to become a premier mining company that generates exceptional value and serves as a source of pride for all stakeholders, including employees, communities, and nations. FI employs thousands of workers, and its operations have had a significant impact on the economy of surrounding areas. As of the end of 2022, FI workers consist of 5.858 permanent employees, comprising 41.3% of Papuan employees, 55.93% of non-Papuan employees, and 2.71% of expatriate employees. There are 23.463 contractors’ employees support mining production and non-production activities, with 19.65% of Papuan content, 77.93% of non-Papuan employees, and 2.42% of expatriate employees.

FI employees are divided into Expatriates and National Employees, based on their salary structure. Detailed in Fig. 3, Expatriate employees comprise all staff, while National Employees are further divided into two main groups: Staff and Non-Staff. Staff members receive a fixed monthly salary and may work additional hours as needed, while non-staff members are paid based on the hours they work and can earn overtime and bonus pay for any hours worked beyond the standard 40-hour workweek. National employees fall into four categories:

1. Basic employee/Non-Staff (Pratama: category F–A)

2. Junior employee/Staff (Muda: Level 1–3)

3. Middle employee/Staff (Madya: Level 4–5)

4. Senior employee/Staff (Utama: Level 6 and Director)

Based on levelling, FI employees consist of six employees’ levels, which are as follows:

1. Level 1 – Officer and Foreman

2. Level 2 – Senior Officer and General Forman

3. Level 3 – Superintendent

4. Level 4 – General Superintendent and Section Head

5. Level 5 – Manager and Senior Manager (SM)

6. Level 6 – Vice President (VP), Senior Vice President (SVP), Executive Vice President (EVP), and director.

Fig. 3. FI Staff employee based on leveling. Source: Freeport Indonesia, 2023 Manpower Report.

The Administration Department is part of the Operating, Department and most of the manpower is located in Papua as a support team for Mining Operations. The position of the Administration Department in FI organizational chart is illustrated in Fig. 4, and its demography is detailed in Table I.

Fig. 4. Administration Department in FI Organizational Chart. Source: Freeport Indonesia, 2023 Manpower Report.

Table I. Administration Department Manpower Demography

Divisions name	Leader	Manpower	Turnover
St Business services & Transport	Expatriate VP	243	7
Supply chain management	Expatriate VP	209	4
Business continuity, Asset control	Expatriate SM	6	0
Corporate planning & Integration	Expatriate Mgr	6	0
Management information system	National VP	133	5

Unlike any other, the Administration Department in FI supports operations across the mine site from Portsite to Grasberg. Within this department, the Strategy Business Services and Transport division is responsible for managing the catering services and transportation operations. This includes charter aircraft that transport guests, employees, and contractors to specific cities in Indonesia with final stops in Jakarta and Timika. The Supply Chain Management division plays a vital role in improving and coordinating the supply chain process for the materials, products, and equipment needed at the mine site.

The Business Continuity, Asset Control divisions are responsible for identifying, assessing, and managing risks to maintain smooth mining operations. They strategically plan and manage assets to minimize disruptions and ensure profitability and longevity. The Management Information System (MIS) division develops, maintains, and manages technological systems and software programs that collect, analyze, store, and share important mining data. They also maintain information technology infrastructure, ensuring reliable connectivity, data security, and efficient software applications for effective communication, decision-making, and productivity in mining.

The Corporate Planning and Integration division is responsible for the planning, maintenance, development, and operation of various facilities at mine sites to support employees and daily family needs, such as supermarkets, hospitals, and schools.

Business Issue

Considering the vast coverage and important functions of the Administration Department, qualified personnel are expected to fill the key positions in each division. The key positions considered by leaders determine continuity and enhancement in business services to support Mining Operations. They provide linkages between C-suite senior managements, executives, and front liner staff. As such, leaders are crucial for the ongoing success and survival of business operations.

The demographics of national employee leaders (in this case, levels 4, 5, and 6) in the Administration Department are illustrated in Fig. 5. Based on the FI Manpower Report, as per Jan 2023, the total number of national employees in the Administration Department is 597. In the last 11 months of 2023, National Employee turnover was 2.68%. 25 Of the cases, 25% were due to deceased sickness, and the rest were due to normal retirement. The retirement age in the FI regulated based on the Government of Indonesia is 55 years. Although this value is low, one of the 16 vacant positions from this turnover is a Manager position due to retirement. Based on Fig. 5, there are currently nine national leaders who will become potential vacancies in five years, two of which will be vacant in 2024. Therefore, three leaders’ positions will need to be filled in 2024.

Fig. 5. Admin national employee leaders demographic. Source: Freeport Indonesia, 2023 Manpower Report.

Problem Definition

In 2009, FI established a Career Management Policy that included succession-planning created by the FI Manpower Board. The policy belongs to Learning and Organizational Development (LOD) division. However, implementing this policy is challenging because the skills and job requirements are constantly changing. The policy lacks clear frameworks or procedures, leading to inconsistent procedures and unclear succession-planning targets. Currently, FI does not have ready successor data for key leadership positions and successors are chosen by supervisors at the VP level. When a national leader leaves because of resignation, retirement, termination, or passing away, the position remains vacant until a new leader is appointed.

The FI has the regulation to review and update each policy every three years, the Career Management Policy dated May 1, 2009. This policy needs to be revisited. The absence of succession-planning leads to inappropriate expertise at the opportune level, which affects Administration Department performance. With this condition, the main stakeholder–EVP Administration–advocates for the improvement and management of succession-planning in order to prepare future leaders and facilitate seamless transitions in the current leaders’ departure. Therefore, idle leadership will not happen so that the operations of the Administration Department run smoothly.

Literature Review

Succession-Planning

According to Rothwell (2005a), succession-planning involves systematic identification of the critical needs for intellectual talent and leadership across the organization in the long term, and grooming individuals to assume the present and future job responsibilities that are essential for the organization's functioning.

Organizations must anticipate inevitable turnover and establish a succession plan to ensure continuity in key leadership positions. A well-crafted succession plan not only supports growth and stability but also fosters employee retention and internal development. According to Rothwell (2010), succession-planning was initially viewed as a risk-management tactic aimed at minimizing the impact of key leadership departures. The scope has evolved significantly over time. Based on Routchet al. (2018), the potential gains from effectively implementing succession-planning extend well beyond the immediate advantage of maintaining a reliable pool of leaders prepared to assume new responsibilities. The additional benefits are as follows:

1. A broader array of leaders resulting from an impartial, unbiased selection process.

2. Improved decision-making regarding promotions and developmental investments through more effective utilization of data and organizational input to make informed decisions.

3. Expanded career advancement opportunities for emerging leaders lead to increased engagement and retention of leadership talents.

4. A more robust organizational culture can be achieved by advancing leaders who embody the organization’s articulated goals and objectives.

5. A workforce is equipped to thrive under dynamic and diverse conditions, thus future-proofing the organization.

6. Enhanced organizational stability and resilience, fostering market confidence and bolstering shareholder value.

The Need of Succession-Planning

Charanet al. (2011) underscored the importance of cultivating strong leaders from within the organization rather than relying primarily on external hires. While external hiring may be more appropriate for lower levels, the focus of leadership positions should be on internal development and promotion. Rothwell (2007) stated the following:

“Succession-planning as a systematic way to ensure that employees in a particular organization are competent enough to develop and then replace strategic roles in organization hierarchy.”

Rothwell (2005) elaborated in his book that organizations without a structured succession-planning system, such as a formal succession plan, encounter challenges in several areas. These include delays in filling key positions, reliance on external candidates to fill critical roles, ongoing concerns about turnover in key positions, unpreparedness for potential replacements lacking essential skills, and the risk of losing the most qualified talent. These are significant issues that organizations often overlook, stemming from a lack of formal planning.

Recommended Practice in Succession-Planning

Giambatistaet al. (2005) suggested that the field of succession-planning and management lacks a unified theoretical and methodological approach. According to Giambatistaet al. (2005), diverse perspectives exist regarding the interrelationships among various succession factors. Various authors have proposed theoretical concepts to guide the establishment, comprehension, and evaluation of succession-planning and management efforts within organizations (Adamset al., 2014). Rothwell and Kazana (2011) emphasizes the importance of organizations formalizing their succession-planning and developing detailed frameworks as integral components of their strategic and management tools. Rothwell suggested a seven-point enhancement model which includes (1) visible commitment that promotes succession-planning management, (2) implementing assessment criteria of present work and human resource requirements, (3) using an appraising system to evaluate performance, (4) assessing future business changes and human resource requirements, (5)assessing future individual potential, (6) closing the development gap, and (7) evaluating the subsequent succession development program.” (p. 79).

Supporting the principles of succession-planning, (Alvaniet al., 2016) asserted that a well-structured succession-planning management system, leveraging organizational strengths as a strategic approach to talent management, effectively fostered the retention of internal talent within the organization.

Methodology

Qualitative Method

The methodology chosen for this study was a qualitative approach. Qualitative research prioritizes the voices and perspectives of participants that are interviewed (Bowden & Green, 2010). This allows researchers to understand the lived experiences, beliefs, motivations, and subjective interpretations of individuals. Therefore, researchers will generate new hypotheses, theories, and concepts by exploring diverse perspectives, experiences, and narratives. By interviewing interviewees, the qualitative method provided a more human-centered and holistic understanding of succession-planning (Creswell, 1998).

The advantage of qualitative research is that it can provide rich and detailed insights into complex phenomena. Kim (2006) mentioned that by using open-ended questions, interviews, observations, and focus groups, researchers can gather extensive data that captures the nuances and complexities of the research topic. This depth of information helps to understand the context, motivations, and meanings attached to behaviors or experiences, leading to a more comprehensive understanding of the research problem. Another advantage of qualitative research is flexibility and adaptability. Qualitative research ensured the inclusion of diverse voices and experiences.

Data Collection Method

Interviews, recognized as a crucial qualitative data collection method, have been extensively employed in field studies and ethnographic research. Thoughtfully executed personal interviews have proved highly effective for gathering qualitative data in field studies (Qu & Dumay, 2011). Primary data will be obtained through semi-structured interviews with the five highest national employee leaders of each Division in Administration Department.

Semi-structured interviews are the most prevalent qualitative research method (Alvesson & Deetz, 2000, p. 194). This approach offers increased flexibility, accessibility, and comprehensibility, enabling the revelation of significant, often-concealed aspects of human and organizational behavior (Qu & Dumay, 2011). The interview questions were predetermined and subject to further elaboration by the researcher, who intended to secure the necessary data obtained from their specific succession-planning experiences.

Data Analysis Method

When the interview process is completed, the data collected with video and audio are transcribed to provide textual data for content analysis using edited or clean transcription. The edited or clean transcription used in this study, due to its emphasis on producing high-quality documents, entails the exclusion of sentences or phrases that are considered unnecessary, excessive, or grammatically incorrect. Despite the omission of specific words or sentences, the core meaning and the overall message of the text remain intact.

The data were analyzed by reassembling and assigning codes based on component descriptions. An Excel spreadsheet was used to organize emerging themes and patterns. Delve software was used to organize and track evidence for reliable research to support the analysis of data using grounded theory. The utilization of software streamlines the process of evaluating unprocessed data collected from interviews to discern patterns or themes derived from interviewees' experiences (Yilmaz, 2013). All key themes in the findings were compared and contrasted with existing literature and research.

Every response was handled with strict confidentiality, and only the researcher conducted the data analysis and interpretation. The identities of the interviewees and their affiliations were kept anonymous. Pseudonyms were employed to safeguard confidentiality and protect the participants' anonymity, and the interviewees were referenced by code names such as Interviewees A, B, C, D, and E. Certain aspects of the organization and its personnel were not discussed by the interviewees due to confidentiality considerations. Given the profound exploratory nature of the research, the philosophies and theoretical perspectives of grounded theory are well suited for this study.

Grounded Theory

Grounded theory has conceptual roots in sociology and was established by Glaser and Strauss in the 1960s. Grounded theory is a qualitative methodology that allows for the examination of a specific phenomenon or process, leading to the discovery of new theories constructed through the collection and analysis of real-world data. The process of gathering data, analyzing it, and developing theories unfolds in an iterative manner. Iterative data collection and analysis continue until theoretical saturation is achieved, signifying the point at which additional data cease to yield further insight into the emerging theory.

According to Strauss and Corbin (1998), grounded theory originates from systematically collected and analyzed data throughout the research process. In this approach, the collection, analysis, and development of theories are intertwined. Researchers do not commence a project with a predetermined theory; instead, they initiate their work within a specific field of study and permit theories to emerge organically from collected data.

The grounded theory formulation used in this study was adopted from Delve and Limpaecher (2021) and is summarized as follows:

1. Establish initial research inquiries

2. Enlist participants and gather data via interviews (theoretical sampling)

3. Segment transcripts into segments (open coding)

4. Categorize segments into codes (open coding)

5. Organize codes into categories (axial coding)

6. Analyze additional segments and compare them with codes

7. Iterate through steps 2–6 until theoretical saturation is achieved

8. Formulate the core concept (selective coding)

9. Craft the grounded theory document

In grounded theory research, the researcher acts like a detective, solving a mystery, as they identify and rule out different suspects. This investigative role is referred to as the theoretical sensitivity of the grounded theory design. Fig. 6 shown the formulation process of Grounded Theory. Theoretical sensitivity represents an inherent attribute of the researcher, and their expertise is used to conduct the study (Strauss & Corbin, 1998). Therefore, it seems appropriate to provide information about the researcher's background.

Fig. 6. The formulation process of Grounded theory formulation adopted from Delve and Limpaecher (2021).

Findings

Interviews were conducted with five interviewees, representing leaders from each division inside the Administration Department as detailed in Table II.

Table II. Interviewee Data

Participants	Level	Age	Int. Date	Int. Time	Duration
Interviewee A	5	<50 years old	14-Nov-23	10:30 AM	19:50:00
Interviewee B	5	<50 years old	14-Nov-23	11:00 AM	22:58:00
Interviewee C	4	<50 years old	15-Nov-23	2:30 PM	17:04:00
Interviewee D	5	>50 years old	16-Nov-23	4:00 PM	22:57:00
Interviewee E	6	>50 years old	17-Nov-23	4:00 PM	26:29:00

The purpose of this study is to find a strategy to improve and manage succession-planning implementation in the Administration Department of FI. This was achieved through the following themes.

• To identify the knowledge and experience of succession-planning among leaders in Administration department.

• To discover the importance of implementing a formal succession-planning in Administration Department.

• To identify the challenges faced in implementing succession-planning in Administration Department.

• To explore ways of managing succession-planning in determining organizational performance.

It also demonstrates the degree of correlation identified between the researcher's analysis and literature review pertaining to previous studies on succession-planning.

Improving Succession-Planning

For the first theme, each interviewee acknowledges the importance of succession-planning and regards it as an essential strategic initiative for the future. Every interviewee emphasized the significance of succession-planning as a fundamental tactic for the entire organization or a critical function of LOD and Human Resource Department (HRD) in FI, even prior to the researcher asking the initial question. The second theme clearly reflects the need for a succession-planning policy.

While some interviewees shared their views on top management's support for succession-planning, others perceived varying aspects of top management's involvement. One participant contended that commitment to top management was crucial for the effective execution of succession-planning. Furthermore, they pointed out that succession-planning can also encourage top management's active participation in and commitment to the process. The third theme is also reflected on the employees’ side. Resistance from employees can be a serious challenge for various reasons such as fear of job insecurity, concerns about fairness in the selection process, fear of career limitations, lack of trust in the process, uncertainty about their future within the organization, and a sense of being excluded from the decision-making process.

To address this challenge, all interviewees advised that a proactive communication strategy should be implemented. In this case, organizations or departments should focus on transparency, fairness, and open communication. This clearly explains the reasons behind the changes, desired outcomes, and how employees are involved and impacted. It is crucial to ensure that employees understand the whole idea and purpose of succession-planning, how it benefits both the organization and individual career growth, and opportunities for development and advancement for all employees. Offering workshops or seminars on the benefits of career planning, coaching employees on how to effectively participate in the succession-planning process and providing feedback on individual development plans can help employees feel more empowered and engaged in the program.

Furthermore, seeking input and feedback from employees during the succession-planning and implementation stages can help address their concerns. Conducting surveys or focus groups to gather input on the new program and incorporating their suggestions, when feasible, demonstrates a commitment to inclusivity and collaboration are also suggested by interviewees.

Developing and grooming potential successors for key leadership roles require a combination of strategic approaches. A comprehensive leadership development program, performance evaluations, executive coaching, succession-planning, culture of continuous learning, and supportive network of mentors are all crucial components. With these strategies, organizations can ensure a sustainable pipeline of skilled leaders ready to fill key leadership positions.

The timeline for succession-planning can vary based on the specific needs and circumstances of an organization or department. All of the interviewees had one voice saying that it would be a long-term process for succession-planning. More than three years is the average answer. However, the interviewee mentioned the phases for succession-planning, planning and selection, preparation and mentoring, and transition and mentoring. Based on the interviewees’ answers, the Administration Department succession-planning timeline was followed.

According to Perrenoud (2012), from his extensive research on construction companies, in Fig. 7, there were four most common time periods found in succession-planning:

1. The median duration from the start of succession-planning by the predecessor to the actual transition period (five years).

2. The typical duration from the onset of succession-planning to the point of successor selection (two years).

3. Mean duration for which the successor had to prepare for the actual transition period (three years).

4. The average number of years the predecessor would remain with the company after the transition (four years).

Fig. 7. Administration department succession-planning timeline.

In his roadmap to succession-planning, Rothwell (2001, 2005a) mentioned that the initial phase of succession-planning involves crafting a mission statement. This statement should articulate the reasons behind an organization's pursuit of succession-planning and the desired outcomes envisioned by the stakeholder group. Without careful deliberation on these aspects, succession-planning and management will lack direction and purpose, akin to sailing without a navigational guide. The mission statement cannot be replicated or imitated by another organization, as each organization exists within its own distinct internal and external circumstances. Furthermore, organizations are situated in varying stages of development. They are at different stages of organizational development. Administration, as part of FI as an organization, will adopt the main succession-planning framework that FI built. Despite this, as a large department with five divisions, the Administration Department may adjust the framework.

Managing Succession-Planning

For the first theme, interviewees were asked, “Can you describe your current experience in managing a succession-planning program? What specific strategies and approaches do you implement?” According to interviewees, identifying and assessing potential successors within a department involves a comprehensive strategic process. It begins with talent identification through performance evaluations and feedback, followed by a thorough competency assessment of technical skills, soft skills, and leadership potentials. Regular performance reviews and succession-planning meetings help evaluate and collectively identify high-potential employees. Tailored individual development plans are then created to address skill gaps and provide targeted training and coaching, whereas job rotations and special project assignments offer opportunities to assess capabilities in diverse roles.

The next step in managing and the second theme of the succession planning interviewees mentioned several ways to establish key competency skills: role analysis, research industry best practices and benchmarks, developing a competency framework, validating and refining the competency framework through discussion with experts, senior leadership, and each department stakeholder. Aligning the succession-planning program with the long-term goals of the organization and strategic objectives involves several key steps to ensure that the program effectively supports the organization's vision and future direction, a thorough understanding of the organization's strategic direction is essential, identification of critical leadership needs and competencies required, establishment of clear criteria, program integration with strategic priorities, engagement of senior leadership, continuous review and adjustment, and clear communication.

In summary, for the third theme, building relationships, effectively communicating benefits, and involving stakeholders of succession-planning in Administration, such as the department EVP, LOD VP, and HRD VP, throughout the process are key elements in gaining support and driving successful succession-planning initiatives.

Careful selection of suitable metrics is crucial when assessing the status of succession-planning within an organization. It is essential to gather and analyze data consistently and make decisions based on the results in a data-driven manner. Here are metrics suggested that can be used to evaluate the success and effectiveness of succession-planning program based on the interviewee perspectives: (1) the succession rate, (2) ‘time to fill’ the leadership position, (3) the percentage of critical roles filled internally, (4) employee retention, (5) the promotion rates of the participants in succession-planning program, (6) performance rating of successor, (7) talent pipeline strength, and (8) number of High Potential Employee (HPE) identification for each critical role.

Leveraging technology for succession-planning management in today’s business landscape involves the use of various digital tools and software solutions to effectively identify, develop, and manage potential successors within an organization. This approach aims to ensure a smooth transition of key leadership when current employees retire, resign, or move to other opportunities. Most interviewees mentioned the software that is currently in widespread use, such as HRIS (Human Resources Information System) that has built-in succession-planning modules, Talent Management Software, Performance Management Software, Learning Management Systems (LMS) used for providing training and development opportunities to prepare potential successors for future leadership roles, and Employee Development Software, which focuses on identifying skill gaps, creating personalized development plans, and tracking progress towards goals, which can be valuable for succession-planning purposes.

Interviewee E presented reasonable advice on leveraging technology to support succession-planning. He highlighted the significance of SAP as a widely utilized tool in various aspects of FI business operations such as finance, supply chain, operations maintenance, LOD, and HRD. He suggested focusing on process maturity improvement, utilizing existing systems, and potentially referring to best practices and tools for people’s development, such as those recommended by Gartner. He also emphasized the importance of organizing data and leveraging the MIS division, which is part of the Administration Department and internal data science capabilities. Ultimately, he proposed establishing a formal talent management program to execute improvements and collaborate with external agencies.

Succession-Planning Implementation Plan

When implementing a succession-planning policy and framework in an organization, or in this case, is the Administration Department in the event of the absence of an established policy or framework, it is essential to begin with a comprehensive assessment of the department's current and future talent needs as follows:

• From the FI succession-planning policy, the Administration Department develops and applies a structured succession strategy that encompasses policies, protocols, and systematic procedures for cultivating, guiding, and retaining potential successors.

• Establish an Administration Department succession committee that collaborates with LOD to effectively address the department's succession requirements.

• Thorough consideration of creating an official succession plan that is effectively communicated to ensure that divisions within the Administration Department exhibit accountability, consistency, and uniformity.

• Additionally, explore the possibility of instituting a leadership development initiative that seamlessly aligns with FI's strategic objectives and succession plan as a continuous improvement.

Succession-planning is an entire process and system akin to other human resources practices. It is important to note that no single model or approach can universally accommodate all organizations, departments, and situations. Rothwell (2005b) proposes an incremental implementation strategy. Following this phased methodology, organizations advance through a developmental life cycle in their succession-planning and management initiatives. At each iteration, organizations acquire greater insight into the actions and methodologies necessary for success. He outlined the progression of succession-planning across the five generations.

Succession-Planning Justification

Having a non-existing succession-planning policy and framework can lead to several significant challenges for FI. Without a comprehensive strategy, organizations may struggle to identify and develop future leaders, resulting in leadership gaps and potential disruptions. A well-designed succession-planning policy can mitigate these risks by ensuring a continuous supply of talent and minimizing the impact of succession vacancies.

Furthermore, a non-existing succession-planning policy may lead to a lack of career development opportunities for employees. This can decrease employee engagement, hinder talent retention, and limit organizational growth. By implementing a succession-planning policy and framework guided by LOD supported by HRD, FI as an organization and Administration as a department can provide employees with a clear career progression path, motivating them to stay committed and invest in their development.

Additionally, succession-planning helps organizations build bench strength and reduce reliance on external hiring. A non-existing succession-planning policy can result in increased recruitment costs and time-consuming hiring processes. By grooming internal talent and developing a pool of potential successors, organizations can reduce recruitment expenses, leverage existing knowledge and experience, and ensure smooth transition during leadership changes.

Conclusion

Succession-planning encompasses the strategic identification of the FI organization as well as the Administration Department’s ongoing demand for intellectual talent and leadership, coupled with the preparation of individuals to assume current and future work responsibilities essential for the organization's sustained success. This process involves the systematic identification of pivotal FI national employees’ leadership roles, starting from Levels 4, 5, and 6 within the organization. Furthermore, succession-planning aims to facilitate flexibility in lateral national leaders’ transitions and to ensure that as individuals progress to higher levels of seniority, their leadership competencies evolve to encompass a broader scope aligned with FI overarching objectives rather than being solely department-centric. Succession-planning is a proactive process that aims to secure the continuity of leadership by nurturing internal talent through deliberate and planned initiatives (Rothwell, 2001). Therefore, there is a clear need for effective succession-planning, whether as a standalone policy or as an integral component of Career Management policy, offering detailed frameworks and guidance that ensures a smooth transition of leadership, minimizes disruptions to operations, and maintains organizational stability.

It is essential to recognize that succession-planning and management should not be restricted solely to leadership positions or middle and senior employees. Instead, it is crucial to have a comprehensive approach that includes identifying critical backups and fostering the growth of employees across various job categories, including professionals, technicians, salespeople, clerical staff, and production team members (Rothwell, 2005b) as well as across junior and basic employees in all departments of FI.

The necessity to broaden the scope of succession-planning beyond middle and senior positions is increasingly crucial, as Administration Department actively strives to cultivate high-performance and highly engaged work environments. The emphasis lies on decentralization, where decision-making authority is dispersed throughout an empowered workforce and leveraging proprietary technical expertise gained through years of experience within a single corporate culture. These factors are vital for successful business.

One objective of succession-planning is to align an organization's current talent pool with its future talent requirements. Another objective is to assist the FI organization in addressing operational and strategic challenges by placing the right individuals in the right roles at the right times, thus enabling them to carry out the necessary tasks effectively. In this regard, succession-planning should be recognized as a crucial instrument for FI organizational learning. This ensures that the knowledge and insights gained from past experiences, often referred to as FI institutional memory, are preserved and utilized to facilitate continuous improvement in work outcomes, also known as reflective learning.

Acknowledgment

The author first and foremost, the greatest gratitude to the OWNER of LIFE, Allah Bapa Yang Maha Kuasa, for the opportunity to see more of the world and broaden knowledge by pursuing the dream of continuing higher education by joining the Freeport Indonesia MBA scholarship program. The author would also like to express profound gratitude to Dr. Henndy Ginting, S.Psi., M.Si.Psikolog for his guidance as the supervisor. In addition, to all interviewees for their valuable contributions, colleagues, and Freeport Indonesia MBA Batch 5 teams.

Conflict of Interest

Conflict of Interest: Authors declare that they do not have any conflict of interest.