We’re well aware that shifting demographics will result in significant numbers of experienced people leaving the workforce in the near future. We’ve all heard that talent will be a key differentiator between successful and unsuccessful organizations. We understand that succession planning is important. So why are so many organizations failing in their succession planning efforts? I believe that it’s because most do little more than pay lip service to the notion. As with anything else in life, if it’s worth doing, it’s worth doing well. So what does it take to do it well?
- Involve the CEO and the Board from the outset. Succession Planning should never be owned by HR. HR is a facilitator of the process, but the CEO needs to be the owner if it is to be more than an exercise in paperwork. The CEO must champion the process and hold the Executive Team accountable for contributing to it effectively. The Board’s role is to hold the CEO accountable and to ask good questions and offer feedback to ensure a robust plan is developed.
- Identify critical roles to be included. Some organizations create succession plans only for the CEO and the Executive Team. This is a starting point, but it misses the mark. To be effective, a succession planning process should target all critical roles within the organization. These include key positions that are crucial to strategic or operational success. These may include positions at lower levels of the organization; particularly those that require a specialized skills set or are hard to recruit for.
- Assess performance and potential. Many organizations treat performance and potential as if they were synonymous. And yet, research shows that over 70% of high performers are lacking the skills required to be effective at the next level. Is it any wonder why our succession planning efforts fail? To assess potential, we need to consider an individual’s level of learning agility and the extent to which they have the ability, aspiration and engagement required to advance to more senior levels. To overcome bias, the determination of potential should involve more than just a manager’s opinion. It should be informed by the use of objective assessment tools and robust leadership team discussions.
- Look wide and deep. When assessing potential and considering possible successors, don’t confine yourself to functional lines; look across the organization for talent that could be transitioned from other areas. Also, look deep in order to spot talent early and develop a strong leadership pipeline for the future.
- Develop talent pools and consider two to three potential successors for each critical role. It’s a great idea to develop talent pools from which to draw, but when it comes to filling critical positions within the organization, there is a need to develop more specific plans to prepare potential successors to step in. As such, it’s good to identify two or three potential successors for each critical role, in case one or more leave before the position becomes vacant. With these individuals, create specific development plans to ensure that they acquire the necessary competencies and receive the required exposure to fill the critical roles.
- Identify timelines for succession. Who do you have who could fill in temporarily in the event of an “Emergency” to bridge the gap for up to 12 months? This person might be a business contingency, rather than a viable long-term incumbent. If there is no one person who could fill the gap, could the responsibilities be divided between several people? Who do you have in the organization who is competent and “Ready Now”, but may not be immediately available? And finally, who are the potential “Future” incumbents and what is the timeline that would be required before they would be ready?
- Focus of development. A succession plan in and of itself will fail if it’s not supported by well rounded development plans. Look for ways to facilitate knowledge transfer between current incumbents and potential successors. Consider mentoring arrangements and exposure to key roles to provide breadth and depth. Think about the fact that the best development plans involve 70% on-the-job activity, 20% coaching and observation and 10% course work and reading. Look for ways to build in acting assignments, secondments, lateral moves, special projects and other experience based learning strategies.
- Hold leaders accountable for Succession Planning and Development. The CEO needs to hold his team responsible for developing and implementing sound succession plans. Cross pollination of talent between business and functional lines should be encouraged and rewarded. Ensure that leaders follow up and report on progress against development plans. Tie these key requirements to executive performance evaluation and compensation.
- Invest in strong on-boarding plans. To set transitioning leaders up for success, invest in a sound 6-12 month on-boarding plan. As part of the plan, clarify expectations, facilitate connections with key stakeholders (lateral and vertical), define strategic priorities, build networks for support and sharing of resources, and plan for early wins to establish credibility. Consider making coaching support available, or having the previous incumbent act as a mentor.
- Monitor and measure success. Select, monitor and measure key metrics that are important to your business. Consider including some of the following:
- Bench Strength: % of key positions throughout the organization with at least one internal candidate that the organization has identified and is willing and qualified to succeed
- Depth of Bench: % of key positions with two or more internal candidates that the organization has identified and are willing and qualified to succeed
- % of target population seen as ready to progress within a defined timeframe
- % of key positions for which no internal successor has been identified
- % of key vacancies filled by internal candidates
By taking these steps, you will be positioned to ensure that your “Succession Plans” are “Successful”!