Volume 14, Number?3
The Lost Art of Succession
It had been more than a decade since the board brought him
in as president of the foundering company.?They had needed someone with the
confidence and determination to shake things up and redirect what was once a profitable
enterprise.?It was not easy, particularly the people side.?As president, he
had to dismantle old loyalties, habits and cultural norms, and implement a new
vision.?He eventually replaced three-quarters of the executive cadre, most with
people new to the company.
Despite the agonizing decisions and wrenching change,
things had gone relatively well. ?He was generally satisfied with his
accomplishments.?The company was again a force to be dealt with.?Recognizing
his responsibility for the company's transformation and renewed prosperity, the board
appointed him chief executive officer four years ago.?But he and the board now
understood that time was working against them.?New initiatives were necessary to
sustain growth.?New leadership could and should take the company the next step.
The CEO was not yet ready to retire, but he sensed that
the board was restless for the new thinking that would facilitate the future strategic
direction of the company. ?Banter at board meetings touched on how he would use his
leisure time.?Then came the questions from board members about issues of
succession.?His answers were not as crisp as usual.?The discussion made him
uncomfortable.?He recognized that the company's lack of preparedness on this point
was ultimately his responsibility.
He and his team had been so busy fixing, implementing and
creating, that they had given virtually no thought to leadership development and
succession planning.?He believed that the company certainly had more talent to draw
from than when he arrived, but he was unsure who could provide the top leadership
necessary for the future.?Prior to his arrival, his predecessors had badly misjudged
the talent requirements.?Now he was wondering if he had done the same.
It was his job to provide the board with legitimate
choices for his replacement and that of other key executives.?They may choose to go
outside again, he thought, but they surely should not have to do so.?He also
recognized that his job is to guarantee that talent is available to fill new positions
resulting from growth, and to ensure the development and renewal of leadership
capabilities, in general, throughout the company.?The task before him was clear:
begin immediately a process matching the talent with the company's strategic
imperatives.?Then take the necessary steps to promote the growth of people and put
into place a system to measure objectively their progress.?He wondered how he could
have underestimated such an important responsibility.
<font color="#A00000">You are Not Alone
The above scenario is more the norm than the exception.?The majority of
companies today do a haphazard job of identifying and developing successors for key
positions. ?A survey of more than 500 human resources professionals conducted
recently by RHR International revealed that succession planning is neglected or done
poorly by most. ?Less than one-quarter of the respondents said their company has a
well-developed management succession system.?Less than one-third said their
organizations link succession planning to strategic business needs. And slightly more than
one-third incorporate succession planning as part of a broader management development
effort. ?Almost half the respondents said their companies are not prepared to
replace key executives when faced with a sudden departure. </font>
The fact is, not preparing for the inevitable exposes a
company to significant risk. ?And, after all, everyone will eventually leave a job,
whether through natural progression or unusual occurrence.
Succession planning, therefore, should be systematic, ongoing and practiced throughout the
company, especially for critical senior management positions.
<font color="#A00000">Asking Yourself the Right
In order to be effective, a succession planning system must address needs on a
number of levels.?Where to start??Ask yourself the following questions. </font>
What will be the future business environment in which
our company finds itself?
Will it be similar to today's??What market conditions are likely to change,
necessitating a redirection of the company's strategy??Usually, major shifts are
only partially predictable and planning future management needs around them is
problematic.?In addition, incremental changes across a broad spectrum of business
factors can dramatically affect what it takes to succeed in a job.?It is inexact, to
be sure, and may seem like crystal ball gazing, but the future business environment must
be taken into account before any discussion of staffing needs can occur.
What talent will we need to meet the demands of the
Of course, this must be based on the predictions you made about business environment.
?It is important to extrapolate the characteristics that individuals must possess to
succeed in that environment.?Is your company going to seek a new customer base or go
global??Will product development become a greater priority??These choices
change the general skill profile most important for success.젨 They also change
the mix of leadership characteristics and experience required for individual positions.
What talent already exists within the company that
meets those demands?
Are there people in the company whose characteristics match these newly-determined
criteria or whose talents have been underutilized??Many companies have undertaken
extensive outside searches only to discover the ideal replacement within their own ranks.
?It is important to conduct a thorough assessment of all high-level talent. ? You should also concentrate on mid-level, high-potential individuals.
What potential talent exists that can be developed over
time to meet the demands of the future?
With a strong and focused development program you can continually nurture the potential
within your company so that there is always a pool of qualified individuals from which to
draw.?The ongoing attention usually heightens employees' sense of worth and their
loyalty to the company.?These developmental experiences benefit the company and the
individuals, whether or not they are chosen for promotion.
What action plans will help us reach the level of
internal talent capacity we need to drive the company in the future?
This is the key to true preparedness.?Building sustainable development systems and
linking them to succession planning creates a readiness to replace key people in a timely
manner.?A good succession plan helps you know where your talent resides and where
you are weak.?It provides a clear view of the road ahead so that you can take the
appropriate action when necessary to replace a key executive, whether from within or
through an outside search, if necessary.
<font color="#A00000">It is the Journey, Not the
One of the primary reasons for companies' failure at succession planning is that
they treat it as a one-time event, rather than a process.?Senior management often
establishes a succession planning episode in response to an emerging need.?After
they pass that hurdle and fill the key position, they revert to their old ways. </font>
To be successful, a succession system must be tied to the
company's strategic business plan and integrated with other human resources systems.? Top management must take ownership through active involvement and visible support.? It must be a dynamic, ongoing process that provides multiple-source, objective assessment
Once established--and that can take several years--a good
succession planning system nurtures the executive skills and talent needed by the company
to be successful.?It also breeds loyalty within the company's management ranks, a
loyalty inspired by the opportunities available to people through the fair assessment of
both the company's needs and its existing capabilities.
<font color="#A00000">All Companies are Not Equal, All
Needs Not the Same
Taking into account the vast differences among companies, no one system is right
for every one.?However, there are some basic guidelines that can prevent
unproductive false starts in addressing succession planning needs.?Following are
some key factors to consider when developing a succession planning system: </font>
<font color="#A00000">Keep it Simple
Don't create a system that is more complicated than your organization can sustain.
?Today's information technology makes it easy to develop a system that looks good,
but is devoid of human
judgment.?Don't worry about complex forms, reports and lavish databases, but about
essential and useful information.?Encourage good listening and thoughtful questions
as a way of getting at that information. </font>
<font color="#A00000">Make Assumptions
As difficult as it is to accurately predict the future, you must force yourself to
make assumptions about what your organization needs to carry on.?You may not know
when or how your company is going global, for instance.?What matters is that you
have plans to do so, because that colors how you view candidates for top positions. </font>
<font color="#A00000">Put?Accuracy above
Don't worry about consistency with past judgments of a person, but about accuracy
of the judgment.?Executives have a natural tendency to be declarative and they like
to be right, even when evaluating people.?However, there must be a willingness in
this process to take risks in discussing people and their development.?Accuracy
comes through the regular sharing of perspectives.?Raters must recognize that their
job is not to be an advocate, but to fill in the pieces of the puzzle. </font>
<font color="#A00000">Follow through
Recognize that the succession planning process doesn't end with the review.? It requires consistent follow up, development plans and regular revisions, based on newly
acquired information, to gain the greatest value from the system.?Day-to-day
pressures often place development planning and implementation on the back burner. ? This results in development plans being completed just prior to the next review, leaving
little time to assess the impact.?It is important to start development as soon as
you identify the needs, and to set and hold yourself accountable to concrete deadlines. </font>
<font color="#A00000">Be Patient
A succession planning system evolves as those responsible for it develop their
understanding of its?goals and methods.?The raters' sophistication increases
over time as they learn to evaluate people appropriately and to link the strategic
development of the company to the leadership demands.
The payoff is not instantaneous. </font>
<font color="#A00000">Planning is Key to Leadership
Succession planning seems to be a lost art because relatively few companies today
go about it in a broad and systematic manner.?This is at least partially due to the
past decade's short-term emphasis, which placed the focus more on the present than the
future. ?Consequently, as senior management looks for the next generation of
leaders, they are finding shallow pools of developed talent. </font>
Maybe it is the very phrase succession planning that
perpetuates the notion that it is an event.?At RHR, we encourage our clients to
think in terms of?<i>Leadership Continuity Planning.?/i>젨 There is
a growing awareness that, rather than taking the episodic approach in response to specific
position needs, it is necessary to start meaningful and planful programs.?Companies
are again recognizing the value of a programmatic approach to development.?They are
working to regain the important safety net that a succession planning and management
development system working together can provide.?It's just good business.
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