- Talent Management
I’ve written previous about the importance of succession planning (see Injecting “Success” into Succession Planning). The business case for robust succession planning is clear in terms of employee development, streamlining turnover, and promoting from within. The basic process of succession planning is simple enough – figure out what you need, see what you’ve got, and develop what you’ve got into what you need, with continuous assessment all along the way. So why do as many as one out of five companies have no succession plan at all, and many more have only informal discussions about it? It’s time to get serious about succession planning.
Oddly enough, the lack of succession planning seems to be concentrated for the most vital positions of all in a company – senior executives. A Stanford University study showed that not only did less than half the companies have a formal process to develop successors at the senior level, 75% of them felt the pool of potential internal candidates for CEO was inadequate. The study also found that what succession plans did exist were not strongly connected (if at all) to such critical development programs as coaching or mentoring.
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Obviously there’s a sense of urgency that’s lacking in all of this. Think for a moment about this scenario – a senior executive comes in one day and gives her or his two weeks’ notice. That would be a bona fide crisis, right? You’d have a very immediate sense of urgency. The whole point of succession planning is that if or when that scenario happens, you won’t need to react with panic and go into crisis mode. Instead, there would be a nearly seamless transition to the person who has been groomed for years to step right into that position.
It’s important that succession planning be viewed and engaged as a continuous process. If you’re not engaged in the process at all times, you might be surprised to find out that the employees you were thinking of as capable to step into higher roles have already left the organization for greener pastures. If you’re continuously engaged in the process, you’ll know when that happens and you’ll be on top of identifying someone else to be on that path.
Part of the problem with succession planning is that there’s often no one person in charge of it and who is held accountable for it. That’s something that needs to change. Whether or not it should part of the senior HR person’s responsibilities is your choice. If you have a corporate board of directors, it could be one of them who is in charge of it. Personally, I think it’s important enough in larger companies to have it be someone’s full-time job, and fairly high up in the company hierarchy, such as a director of succession planning under the senior HR person.
McCormick, the well known spice company, did the right thing when it came to succession planning for the CEO position. At the start of 2008, then CEO Robert Lawless was 60 years old and stepped out of the CEO position and into the non-executive chairman of the board while 49-year-old Alan Wilson stepped seamlessly into the CEO position, for which he had been groomed during the previous five years. That’s at the heart of succession planning – taking the time to get the internal candidate for CEO ready for the position. Clearly, there has to be commitment on both sides for it to happen. Wilson had to agree years ago to stick around to see this come to fruition.
It helps, of course, that the business was running well on a solid foundation of good strategies, so there was time to engage in this careful planning process. Lawless himself notes that succession planning is a whole lot easier when things are good rather than when things are in turmoil. It’s not like they needed someone to come in from the outside and shake things up – what they needed was someone who knew the company inside and out and could keep a good thing going.
My main point in this article is to get more people to realize how urgent it is to get succession planning right. Although many companies are still struggling after the great recession, things are getting back on track, which means it’s time to get serious about succession planning.