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 DDI Global Leadership Forecast, 85% 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, create the corporate culture, and meet organizational goals. Without succession planning, it becomes impossible to fulfill the company’s vision when key leaders leave the organization. Most companies list succession planning as an important strategic planning priority; however few have invested the time and energy needed to create a plan that can be implemented quickly for either an unexpected or planned departure of a key leadership team member.
“One of the things we often miss in succession planning is that it
should be gradual and thoughtful, with lots of sharing of
information and knowledge and perspective, so that it’s almost a
non-event when if happens.”
~Anne M. Mulcahy, Former Chairman & CEO, Xerox
Many factors have contributed to the leadership development void companies are facing:
- As Millennials flood into the workplace, the post-war generation is heading toward the exits. Over the next 14 years an estimated 10,000 Baby Boomers will retire each day (Source: Pew Research Center) – many from senior executive and professional roles – and few companies have enough qualified candidates to replace them.
- 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 supersedes planning for tomorrow.
- Many organizations eliminated middle manager positions in response to tough economic times and no longer have this group as a source to fill senior level vacancies. This strategy may have helped address immediate needs, but it has created a talent gap as the economy rebounds and companies need fresh perspectives and new ideas to keep pace.
- For high level team members, starting the succession planning conversation can be uncomfortable at best and downright depressing at worst. Most top leaders love their job and derive a large measure of their identity from the professional role they play. They think of building potential leaders, not as the path to growth and prosperity, but as a plan for putting them out to pasture.
“As a leader, you cannot scale the organization until you
understand and perform your role in developing other leaders.”
~ Robert J Anderson & William A. Adams
Leadership development must progress at a pace consistent with what it takes to stay effective and competitive in our complex, rapidly evolving business environment. When it doesn’t, it’s a competitive disadvantage. A strong succession planning process enables an organization to understand the skills and behaviors it needs to execute its business strategy, see the talent gaps, and then determine how best to fill them.
“Succession planning demands the same coherence, discipline,
and thoroughness that governance, enterprise risk,
and strategic oversight do.”
~ Harvard Business Review
Planning for leadership succession must be an integral part of how a company is managed. The best organizations are deliberate in their leadership planning and the guidelines below can prevent a future crisis in leadership succession:
- Establish a well-defined future vision for the business; the successors identified should be carefully considered with both current and future needs in mind.
- Assemble an advisory team to consider all stakeholder perspectives – shareholders, clients, employees, partners, industry influencers.
- Assess risk: identify key positions and how many personnel in those key positions are eligible to retire in the next 5 years.
- Clearly describe the company’s key criteria for future leaders – experience, track record, capacity for growth, emotional intelligence, and qualities of highly effective leaders.
- 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 qualified 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. Future leaders must increase both their competence and evolve in consciousness. As leaders increase in competence, they become more effective. As they increase conscious self-awareness, they become more aware of the messages their actions, communications, and behaviors convey and how those messages are perceived.
- Identify talent gaps that can’t be filled internally and generate an external talent pool.
- Educate all stakeholders about the planned leadership transitions and the role they may play in the process.
- Put the succession plan in writing. Revisit, access and adjust it often.
- Develop an external communications strategy as appropriate.
- Explore multiple scenarios and plan for contingencies.
“Leaders set the context and create the conditions in which
individuals and organizations thrive.”
~ Robert J Anderson & William A. Adams
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 pipeline that aligns with strategic goals is absolutely essential to navigate the future challenges facing today’s organizations.
Let’s grow together…