Reflecting back to a few years ago, I received a telephone call with expected, but very sad news. “Our CEO has lost his long struggle with cancer.” Shortly after hearing this news, the stark reality hit. We had no one identified to assume the helm. We knew that this dreaded day would happen … but we had failed to prepare for “next.”
Many organizations are in the same predicament. Intellectually, we know that leaders move on – voluntarily and involuntarily. We know we need to prepare for succession. But how often do we replace succession planning with other priorities? How often do we say, “We’ll get to that tomorrow”?
To those organizations that do not have a succession program in place, you are not alone. Over the years, research has shown improvement in the numbers of organizations planning for future leadership succession, but the data still indicate that only about 25% of organizations in the United States have a formal succession plan in place. This is a startling statistic considering that every organization (small or large – public, private, or nonprofit) has a need to plan for a seamless transition of leadership.
Why do we not identify and develop successors? Many say that the process is too cumbersome, their organization is too small, or that they don’t have the resources to put toward the identification or the development. For some, succession planning is an indication of one’s own mortality – and sometimes we just don’t want to face that inescapable fact.
I propose that we re-frame our thinking about identifying and developing successors and start taking action to prepare for the inevitable.
Succession planning is a partnership.
As in all effective relationships, succession only works with two willing partners (the employee and the organization). The first task, then, is to look at employee desire.
- Regarding each employee’s career goals – is there a desire to gain more responsibility, oversee staff, and move up the organizational ladder? (Notice money is left out of this conversation. For of course, everyone will say yes to a higher salary!)
- What is the employee’s vision of the future?
- What are his/her one-year goals? Five-year goals?
This information gathering exercise is designed 1) for the employee to think through and communicate goals and desires and 2) for management to gain insight into the employee’s future hopes and dreams.
Succession planning connects desire, exceptional performance, AND potential. ~ Susan Bowen Tweet this!
Desire comes from the employee.
Performance is determined through the review of job history and sustained results.
- Does this person produce results that consistently exceed the operating, technical and professional output expected from a person in their current position?
- Does this person demonstrate excellent leadership ability (such as establishing and communicating strategic direction, inspiring and enabling staff to perform at the highest standards, championing change, and focusing on sustainable results)?
- Does this person achieve results in a way that always builds and maintains constructive working relationships with many people?
- Is this person oriented toward total business results, not just focused on the success of his/her own area?
Many organizations tend to focus their succession pipelines on the exceptional performers without looking at employee potential or employee career goals. You have seen this happen.
A person is promoted to a position because he is an exceptional, operationally talented performer in his current role. Desire and potential are not addressed in the vetting process. In his new role he fails to build the relationships and create the vision and strategy needed to move the company forward. He is removed from his position due to lack of desire and potential.
Shock waves are felt throughout the organization. It is even worse when the person is the CEO.
Realize that potential identification is more “art” than “science.” Rarely do you have objective data to review. Some assessments assist in identifying potential, but it is also helpful to rely on observations of the candidate’s interactions.
- Does this person exhibit broad and deep technical and interpersonal skills?
- Does this person currently demonstrate leadership skills that are expected at the next higher organizational level?
- Does this person regularly work at building new skills and abilities?
- If a people manager, does this person exhibit managerial skills that are expected at the next highest organizational level?
- Is there a “fire in the belly” that will indicate the employee’s willingness to reach for new challenges?
Use a review team process to identify those who can lead the organization into the future (enterprise talent). Assess the desire, performance, and potential of each candidate brought forward. Keep emotion out of the decision-making. This is not a popularity contest. You are building the future of your company.
Consider these Review Team rules-of-thumb:
- Limit the number of enterprise talent to less than 20% of your total employee population
- Prolonged disagreement about a candidate indicates that he/she may not be enterprise talent at this time.
- The CEO owns and stewards the process.
Succession planning requires development of enterprise talent.
Some organizations believe that development creates an inordinate strain on resources (in both dollars and time away from the job). Note, however, that organizational leadership readiness will only be achieved through development.
Bob Eichinger and Michael Lombardo, former associates of the Center for Creative Leadership and the founders of Lominger International (A Korn/Ferry Company), recommend a 70% (on-the-job experiences) – 20% (coaching and feedback) – 10% (facilitated instruction) approach to development.
Considering this approach, the opportunities to develop are limitless. The talent may:
- Manage projects,
- Supervise new teams,
- Work in a new department,
- Sit on a steering committee outside of the organization,
- Volunteer for a leadership position at a nonprofit,
- Present to an organization’s advisory board,
- Participate in the due diligence process for a pending merger,
- Swap jobs with another for a period of time (at least 6 months),
- Take on a global assignment,
- Transfer to a new location, etc.
This development is conducted in the regular course of doing business. The benefits are realized as 1) the enterprise talent gains new knowledge, skills, abilities, and leadership aptitude and 2) the organization gains a real-time view of how the talent is adapting to potentially high-stress situations. This actual experience far outweighs that of a simulated classroom environment.
If you have not entered the succession-planning ring, I suggest you take the plunge. Start simple. Identify and develop the talent for the leadership needs of tomorrow.
Get ready! It’s going to happen.