“Succession is not a series of actions – it is a way to think about the business”.(1)
Succession planning is an integral part of the overall workforce planning within successful organizations. In 2014, the 1.000 biggest companies in Denmark (including family-owned companies) – encompassing 1% of all companies in Denmark – employed over 50% of all employees within the private sector. In fact, when looking exclusively at family-owned businesses, 40-60.000 of them employ approx. 1.3 million people in Denmark. However, only 30% of these family-owned businesses are expected to survive on to their third generation of family ownership.(2) Why? Mainly due to a demonstrable lack of structured succession planning. In fact, most companies rely on the once-a-year executive review to generate their succession insights, all the while that will not suffice. According to the leadership guru, John Burdett – if the dialogue regarding the individual’s succession within the organization is not ongoing, and if that dialogue is not a deeply embedded central pillar of the organization’s approach to talent management, then the overall talent management process of that organization is seriously flawed revealing that critical business risks are not being managed.(3)
Everything suggested so far, leads to one key question; “How good is the succession process in your organization?”. Here are some key perspectives on succession planning:
1. Focus on mission critical positions
Rather than insisting of developing succession for every leadership position – especially within a large organization – focus on the mission-critical positions as they are often the ones that: 1) are extraordinarily contributing to the organization’s overall success, while 2) are difficult to find suitable candidates for – internally as well as externally.
2. Perform an internal and external mapping process
A succession strategy should not only encompass internal candidates but also consider the wider market. In fact, continusly performing broad talent mappings is a prerequisite for conducting effective and successful succession planning. Talent mapping involves employing HR, an executive search company or similar, with the objective of yearly or bi-yearly assessing the market for potential succession candidates currently working within other organizations. Such mapping and assessing is again best done with regards to mission-critical roles within your own business.
3. Ensure a proper “fit” between the successing candidate and the role/company in question
“Succession” defines the mission-critical role, not as it is, but as how it will be, two to three years down the line. Thus, the key question is; “As we move forward, what culture are we seeking to create, and is the suggested successing candidate a fit with everything ‘tomorrow’s culture’ encompass – i.e. is there a cultural fit?” Nothing brings about leadership derailment more than misalignment with the organization’s “needed” culture.(4) Culture however is not the only key dimension of "fit" that needs to be factored in the succession decision – consider also the following:
Performance Fit:
What are the performance needs of the role and how well does the successing candidate fit with such specific needs? Developing a scorecard for the role and, to the extent possible, flexing that scorecard against the needs of the role two to three years down the line, is recommended – i.e. ensure that there is a performance fit between the successing candidate and the role.
Leadership Fit:
What are the leadership expectations of the role? Build future-based and competencies for the mission-critical position in question – i.e. ensure that there is a leadership fit between the successing candidate and the leadership competencies needed in order to bring the organization forward.
Team Fit:
What are the team needs associated with the role? Collaborating with teams in different parts of the organization, or even the world, is a central feature of the continued success of the successing candidate. In fact, factoring in the team skills needed in order to bring the organization forward is key to success – i.e. ensure that there is a team fit between the successing candidate and the various business critical teams.
Additionally, it is crucial to assess which of the classic four business situations the succession candidate may be facing in her/his successor role – i.e. a sustaining success, turnaround, realignment or start-up situation. Each of these encompasses a unique set of risks and opportunities and allows the successing candidate to understand better the frame or structure of her/his challenge and what tasks may be required to bring the organization forward.
In any conversation around succession, the key questions one should ask are: 1) is the succession candidate a fit for the role in question?, and 2) what onboarding agenda needs to be put in place in order to de-risk the (succession) decision? In fact, without truly exploring fit, defining the onboarding needs remains, at best, an intuitive guess.(5)
4. Ensure a proper internal onboarding of the successing candidate
Internal executive onboarding encompasses the transitioning of the successing candidate from her/his existing role to the successor role. “If candidates does not land, they won’t stay”. In fact, a best-in-class integration process is important for internal candidates (as well as for external candidates). If a candidate is not immediately capable of delivering results, then coaching, training, and support is required to make the candidate decision-making competent. Awareness about the challenges inherent a new role will help disclose leadership landmines at every organizational layer and potentially help transitioning leaders, while navigating and avoiding the most obvious landmines. To successfully transition to the next leadership position or level, the executive must therefore be prepared to take various initiatives to accelerate her/his learning and to acquire a whole new way of leading and managing. The internal onboarding platform of any company should ideally encompass a learning management system that will take the transitioning executive through the leadership transition, while offering coaching from trained executives or board members that are “game masters” at their particular leadership level. These executives should be used in a combination of mentor and coach roles.
5. Plan also for the worst case
Assuming that a fully capable successing candidate is not in place, the succession dialogue should include the question, “can we reorganize in order to make it easier to find/develop a successful candidate?” In an ideal world, there should be several potential succession candidates for each mission-critical role. If this is not the case, splitting the position, organizing around the succession issue, and generally making room for a candidate who is less than fully qualified to move into the role as it appears on the organization chart before the position comes open, all represent meaningful succession options – however it comes with a caution. Re-engineering a role should be seen as a short-term contingency, and thus as strategy that adds value only where the candidate has genuine potential to move well beyond the contribution required initially.(6)
Succession and how it is approached is at the very core of the organization’s ability to compete, and the conduct of structured succession planning processes is thus one of the key ingredients to securing sustainable competitive advantages moving forward.
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Sources:
1. Burdett, John O.: The Succession Trap. Paper. 2011
2. Caspar, Christian; Dias, Ana Karina and Elstrodt, Heinz-Peter: The five attributes of enduring family businesses, McKinsey, 2010.
3. Burdett, John O.: The Succession Trap. Paper; p.3; 2011
4. Burdett, John O.: The Succession Trap. Paper; p.6; 2011
5. Burdett, John O.: The Succession Trap. Paper; p.7; 2011
6. Burdett, John O.: The Succession Trap. Paper. 2011