In sports, there are always players ready to fill gaps created by injury, retirement, or poor performance. Baseball has an elaborate farm league system that constantly develops players for the big league, yet in business where the stakes are arguably higher, developing future leaders is often neglected. In fact, according to the 2018 DDI Global Leadership Forecast, 88% of companies don’t have the leadership bench strength needed to meet tomorrow’s business challenges.
Companies rely on their executive team to carry out their mission, cultivate the culture, and achieve organizational goals. Without a strong mid-level leadership bench, it becomes very challenging to seamlessly execute day-to-day priorities and the ability to fulfill the company’s vision when executive leaders leave the organization is at risk. Most companies include succession planning as a strategic priority; however, few have invested the time and energy needed to create a game plan for either an unexpected or planned departure of a senior leader.
Several factors have contributed to the leadership void companies are facing:
- As Millennials are preparing to phase into leadership roles, the post-war generation is phasing out. According to Pew Research Center, since 2010 the Boomer labor force has been declining by 2.2 million on average each year – many from senior executive and leadership roles and few companies have enough qualified candidates to replace them.
- Many organizations have simply under invested in developing their mid-level managers for future leadership positions.
- Planning for future events, like succession, often gets sidelined by the day-to-day management of the business. Achieving the operational goals of today frequently supersede planning for tomorrow.
- For executive-level team members, starting the succession planning conversation can be tricky as retirement timelines, necessary knowledge sharing, and leadership transitions are considered. These conversations are often sidestepped and do not occur until there is a looming vacancy to fill.
A strong succession planning process enables an organization to understand the technical skills and leadership characteristics it needs to execute its business strategy, see the talent gaps, and then determine how best to fill them. Planning for leadership succession must be an integral part of how a company is managed and the best organizations are very deliberate in their approach.
These 9 succession planning steps can prevent future gaps in your leadership bench:
- Establish a well-defined future vision for the business and carefully consider both current and future leadership needs.
- Assess risk by identifying key positions and how many personnel in those key positions are eligible to retire in the next 5 years.
- Clearly describe the company’s criteria for future leaders – experience, track record, capacity for growth, technical skills, emotional intelligence, etc.
- Define precisely what it means to lead with excellence within the organization and provide a common framework and language to inform and guide future leaders.
- Identify potential internal successors and determine their desire to progress as leaders and grow their impact on the company through an intentional two-way dialogue.
- Craft and execute systemic development plans for identified successors and provide real-time feedback based on key criteria.
- Identify talent gaps that can’t be filled internally and generate an external talent pipeline.
- Put the succession plan in writing, reassess it often, and plan for contingencies.
- Educate all stakeholders about the leadership transitions and define the role they will play in supporting the successor and the change process.
Developing leaders who are prepared to navigate complex and ever more challenging business environments is a strategic priority and competitive advantage. Consequently, having a leadership bench that aligns with a strategic vision and goals is absolutely essential to realizing an organization’s future potential.