FAULT LINES IN SUCCESSION
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Succession ‘doing’ is hard Work.
When I work with senior leaders, the barriers to effective succession often come back to being risk-averse, not spending enough high-quality time on talent management, silo-thinking, reliance on known relationships, the halo effect and subjective experiences to identify future leaders. Then there may be a view that ‘outsiders’ will better fit the business context or have the ability to deliver on the required set of new strategic drivers.
Synergies between business strategy, leadership development and risk management should provide a pipeline of outstanding executives who represent genuine potential for senior roles in the medium or longer term.
Although executives and board directors understand the importance of a strong leadership pipeline and succession planning, with a defensible, diverse bench of talent ahead of less prepared competitors, often the outcomes go off track — here are some reasons why.
WHERE SUCCESSION PLANNING CAN GO WRONG
FAULTLINE – No clear talent philosophy and leadership philosophy which shapes, unifies and underpins frameworks, attitudes and language.
FAULTLINE – Time frames lack discipline or are unrealistic. It needs to be an ongoing process rather than driven by an event. To ensure business and talent strategies are tightly fused, start with the outcome in mind and face the realisation that it can take up to two years to move from a plan to action.
FAULTLINE – Inaccurate recognition of talent and missing information. Data and technology steers towards an objective reality. Where personal relationships and subjective experiences are relied on to identify future leaders what results is a strengthening of the ‘established network’ rather than a broader recognition of talented but less visible or diverse (in all its facets) people. Therefore, use a clear set of uniform criteria to assess performance and contribution then search through the breadth and depth of the organisation. Do a reality check within the division, across the firm and at all levels. Avoid the 'halo' effect.
FAULTLINE – Superficial understanding of risks. A dashboard of major talent risks should integrate with the risk management dashboard. The focus should be on critical roles – not only key people. Succession and promotion slates should not be risky business. On the list must be those positions that make a significant contribution to current or future core business activities as well as hard-to-fill roles or those that require specialised training. Do retirements alter plans? Consider unwanted vacancies: would you be able to replace or up-skill and how quickly could a new employee exceed break-even?
FAULTLINE – Impact on revenue, outcomes or returns. Considered efforts to attract, select, retain, engage and develop the right people should be directed at lead business lines, critical market segments, service value, current key client groups, targeted new clients or new revenue streams. A persistent issue is demonstrating a return on investment. Setting meaningful lead and lag human capital metrics is a start. What savings or costs are realised in filling skills gaps, resourcing and developing for future needs, rewarding high-performers and other strategic talent decisions?
FAULTLINE – Assuming certainty in external factors. Talent management has to work ahead of the curve. Develop a range of scenarios to build a picture of how the external environment will affect the organisation, and how the business will respond from a talent perspective. What emerges is a true talent planning document and not just a head-count budgeting process.
FAULTLINE – Narrow approach to supply sources. Looking outside the company helps form a view of community and demographic trends that affect supply sources for critical jobs. Closing any gaps may require alternative strategies such as investment in retraining, rethinking career paths or experience profiles, and redesigning position descriptions.
FAULTLINE – Focus only on specific roles. Traditionally executives would select their own replacement as they approached retirement and then start to develop that person into the role during the transition year. This tends to limit the thinking to within the one business silo and may not ensure development is aligned to business strategy. Focus on, and development of, a talent pool ensures flexibility and more options for all executive roles generally.
FAULTLINE – Overestimating willingness or motivations of identified individuals. Being highly motivated, high-impact talent need stimulating work, lots of recognition, and the right growth opportunities. With a confident view of where they are and their track record, they can be impatient. They want the reassurance and rewards that confirm their contribution and potential are valued. Look for signs of disengagement.
FAULTLINE – Poor experiential development. Although development activities are often part of a future leader’s training it is often based on current needs and not future requirements. The right experiences, that is, challenging experiences that stretch, broaden skills, build expertise, test judgment, shape emotional intelligence, give accountability, produce diversity awareness and promote visibility are the ones that tend to be most valuable.
FAULTLINE – Lack of understanding of what is needed for future success. Often there is an assessment of past and current performance capabilities. There are assumptions that the individual’s strengths, style and motivators will automatically carry them into success in a future role. Helping the individual understand what is needed in the future, plus an awareness of their own style including potential personality derailers will be key. Accurate personal insight, actionable feedback plus clear perspective on capabilities may be gained through a coach or mentor.
FAULTLINE – Failure to execute and follow through. A dichotomy between planning and action exists. Seeing succession planning as an ‘event’ rather than an ongoing process can mean that its execution stalls under the day-to-day pressures of transactional business. To avoid this the development plan and actions should be integrated into other management systems and responsibilities.
FAULTLINE – Lack of sound governance and accountability. Like any other critical business strategy, strength in the leadership pipeline needs structure, focus and commitment at all levels. To ensure its effectiveness, the senior executive group needs to be held accountable with the building of a talent pool as a key performance indicator and be involved in mentoring and talent development across the whole organisation.
FAULTLINE – Not measuring what matters. It helps to choose how you will track the success of your succession initiatives in a way that is meaningful and relevant to your organisation. Here are some ideas: critical roles that have a succession plan, number of successors per critical role, critical roles with a least one ready now successor, time for successor readiness, diverse talent on succession plan, number of critical roles filled by succession plan when an actual vacancy occurs, non-ready successors with the right development plan, those successors who are a high retention risk, turnover in the successor pool, success rate of successors after a new appointment.
Because of the criticality talent management and succession plays in enabling competitive advantage, when executed with discipline it supports a company’s key objectives while providing employees with a clear value proposition.
CEOs and Chairs of talent-rich businesses know that leadership matters, and so does a sustainable leadership brand and reputation that is valued by all people within the organisation – and the marketplace.
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