6 Steps For Succeeding With Succession
If there is one function that represents the “holy grail” of talent management, I believe it is succession planning. Increasingly, the investment community is asking organizations hard questions about the succession planning process they have put in place. At the heart of these questions is the expectation that any unexpected vacancy in the senior team will be addressed through a well-constructed succession strategy.
While it is beyond the scope of this article to lay out a definitive succession planning strategy, I would like to offer up six suggestions I think can help you take your succession planning process to the next level.
1. Start with Your Future Organization. Succession planning is a bit like shooting skeet, in that you have to aim ahead of where the target is moving if you want to be able to hit it. Consider successor candidates for your CIO position. My guess is that unless you are talking about replacement candidates (people who could pinch hit during sudden, unexpected losses), you are looking at three to five years to groom the right successor. So here is my question: Five years from now, are you expecting to be facing the same IT challenges you are dealing with today? By implication, if you make successor decisions strictly in terms of your organization’s current leadership requirements, you are baking in obsolescence.
That is why I encourage senior teams to perform an organizational review before they engage in succession planning. In this review, they are asked to articulate the most critical changes they anticipate encountering in their business challenges over a two- to five-year horizon.
A second stage of the team review involves an honest discussion of how these changes are likely to affect their current organizational structure. Examples include organizational functions that will be shifting from domestic to international locations, or that are expected to dramatically expand over the next few years.
Next, I facilitate a senior team meeting regarding how these anticipated broader changes are likely to shift the competency and experience requirements for key positions.
A valuable byproduct of this iterative approach is that it provides company presidents with an observational window into the strategic thinking skills of their senior leaders.
2. Focus on Your MCPs. All too often, annual succession planning processes become multi-day paperwork drills in which organizations strive to identify successors for every possible position on their leadership bench. Since not all positions are created equal, why not try an alternative approach, which is to put the 80/20 rule to work here? Start out by identifying your MCPs (mission-critical positions). These are the 20 percent of positions in your executive organizational levels (for most organizations, this would be vice president or senior vice president positions and above) that you believe to be mission-critical to the success of your company. I am talking about positions in which the sudden loss of the incumbent would keep you up at night. Highlight these positions in red, and focus 80 percent of your team’s discussion time on getting the best successors for these critical roles.
3. Ask Yourself, “Potential for What?” When it comes to succession, organizations typically place their leaders into the three categories of low, moderate, or high potential. But what exactly do we mean by “high potential”? Are we saying that your high-potential VP of Strategic Planning could prove a likely successor to the CFO? Or are you suggesting this leader also could perform well in other key senior roles, such as that of the SVP of Operations? It is for this reason that I advocate for the use of two levels of high-potential ratings, which I term “high-potential within function” and “high-potential across functions.”
4. Establish Test Points When identifying successor candidates, it makes sense to take risk and guesswork out of the equation. That is why each time a senior leader says, “John has never done XYZ, but I have complete confidence in his ability to do so,” I tend to push back.
My response is, “Why don’t we create a test point over the next few months that would enable you and other members of the senior team to see this individual perform in XYZ area on a limited scale, and see how he does?” The intent here is not to push successor candidates into sink-or-swim scenarios, but rather to help identify developmental events that provide avenues for evaluating those candidates on job demands that haven’t as yet been assessed. Such test points also create great coaching opportunities for successor candidates.
5. Use Multiple Assessors. Some organizations still use the old “heir apparent” model, in which leaders have complete ownership for nominating their successors. But this often means the nominators tend to choose people who look and act like them. In addition, this approach doesn’t allow us to obtain the best possible candidates from across the enterprise-wide population of leaders. That is why I recommend that successor candidates receive multiple ratings from at least four other senior leaders, other than their direct managers. Often, these other leaders see things to which the candidate’s manager is blind, such as how well candidates manage across organizational silos, or how effectively they present themselves to the senior team.
6. Conduct Skip-Level Successor Reviews. Can mediocre, “steady-Eddy” leaders make great talent calls when it comes to picking their successors? Personally, I think not. This is one reason why, prior to engaging in succession planning, I encourage senior teams to red-tag all of their “solid, but not exceptional” leaders. In these circumstances, I strongly recommend that the successor nomination process be conducted by the second-level executive, rather than the incumbent. While this might seem harsh, the hard fact is that a succession planning process is only effective if you trust the judgment of those leaders who are conducting the nomination process. This process also flags those exceptional successor candidates who might benefit from mentoring from leaders other than their managers.
Want to stir up some interesting conversations in your talent management function? Share this article with a few of your colleagues and see where the discussion takes you.
Robert Barner, Ph.D., is an executive coach and talent development consultant based in Dallas, TX. You can read more of his thoughts by checking out the many business books that he has written on Amazon.com.