We are an integral part of the succession planning and execution strategy for a portfolio of global clients across a range of industries. One common theme we see and an obstacle that they seem to face is succession planning in the boardroom. Talent management appears to run smoothly at lower levels in organisations but we are called upon to recruit external candidates for board-level roles because their 'internal' individuals aren't strong enough to step up. It always seems that they are two to three years away.
According to Spencer Stuart, there are 4 key activities you should action today;
1. Start and embrace your CEO succession planning now and make sure it strikes the right balance
Create an open discussion amongst the board and don't let CEO succession be 'the elephant in the room'. Start when a new CEO joins the company and ensure succession planning is a regularly reviewed strategy, up and down your organisation. One of our clients conducts an annual organisation talent review and has a "faces to watch" activity underpinned by an effective leadership development plan to nurture internal leaders. This not only creates a robust succession plan but it also achieves high retention and engagement amongst leaders.
2. Ensure that succession planning is rooted in the future needs of the business
It is important to set your strategy for five to ten years ahead. This allows the succession plan to understand and take account of the future needs of the CEO but also other senior leaders. What you need now in your CEO is likely to be very different to what will be required in five or so years. Having a clear strategy will ensure that you are building a future-proofed talent pool.
3. Thoughtfully and effectively assess internal candidates
Don't allow 'gut feel' and loyalty to be the main drivers behind CEO succession decisions. You need to develop a process to effectively assess internal candidates with an eye on your future needs. An in-depth understanding of internal candidates is critical to your success as is the leadership development support you provide to close any gaps and ensure they are battle ready when the time comes. This should include both 'soft' and 'hard' skills. Candidates may be right for today's culture but are they right to deliver your future strategy? You should include external benchmarking too to see how your talent compares to the best in class available outside your organisation.
4. Assure the development of a robust succession pipeline
Don't put all your money on a few successor potentials. Regular, consistent deep dives into your talent pool are critical to your long-term success.
Here is another great article on talent insights: https://www.collingwoodsearch.co.uk/our-insights/recruiting-retaining-talent/15-surprising-ways-talent-insight-can-future-proof-your-recruitment
There are four main areas that boards continue to find challenging: 1. Getting started and addressing succession planning with the appropriate regularity. Some boards can be reluctant to broach the topic, particularly with a strong, established CEO or when a transition seems distant, or they may over-focus on certain facets of the process. 2. Ensuring that the strategy and criteria for the next CEO is forward-looking enough. When the strategy relies too heavily on status quo assumptions or doesn’t look far enough out, it reduces the chances that the process will produce internal candidates with the right skills for the future business. 3. Thoughtfully and effectively assessing internal candidates. Directors often tell us that they lack the insights with which to thoroughly assess potential successors or to understand whether a candidate will be ready in a specific time frame.