Thinking in Terms of Reality Based Succession Planning
With 1,234 CEO departures in 2010, 1,178 in 2011 and 999 in 2012, turnover rate is down marginally from prior years according to research offered by Challenger, Gray & Christmas, Inc. Here the company’s CEO John Challenger affirmed, “We may see heavy turnover continue into 2013 as the economy continues to improve and companies shake up management to reflect a change in strategy from one centered around maintaining stability to one focused on growth and expansion.”
As executives contemplate more on succession planning, the ability to recognize and train an organization’s next generation of promising leaders is becoming an essential business strategy. This is the reality of strategic succession planning.
CEO turnover rates are lingering at all-time highs and resignation and retirement tend to be the most common motives for departure. A large number of organizations are finding themselves entirely unprepared for leadership turnover of any kind – especially involving the most critical positions held by the highly adored human capital in the C-suite. Marshall Goldsmith, a leading executive educator, coach and author wrote in the Harvard Business Review, “If you are among the companies who are not happy with the impact of your succession planning process, you have plenty of company.”
I have seen the heartache and disruption that comes from being unprepared for leadership turnover. The focus of HR leadership—with the full support and involvement of the leadership team—should be on building the capability of their future leaders while making sure to retain them along the way. Prepare and focus on developing a reality-based succession strategy that is a living, breathing plan of action. Here are five steps to getting started:
First, HR leadership and the executive committee work together as a “Succession Planning Team” to gather key employee data and build a comprehensive list of employees who have demonstrated leadership qualities and professional development acumen.
Still in information gathering mode, the Succession Planning Team collects data about the identified group by reviewing past performance history and asking current leadership for their input on whom they think could be effective in their position.
Once this information has yielded a more tailored group, the Succession Planning Team works to learn more about each individual’s leadership interests, professional goals and aspirations, geographical preferences and any personal limitations.
From there, a few select employees are identified and the Succession Planning Team builds succession candidate “slates”—employees who are interested in roles that current leadership also believes they are capable of holding in the future.
After the candidate slates have been established, the Succession Planning Team works with management to develop exercises, mentorships and training programs that will groom each successor for a key position within the company.
Succession planning and the process of building bench strength are opportunities to inspire younger talent to prepare themselves for future leadership positions within the organization. Encourage A-player professionals to participate in a management “mentorship program.” Facilitate a means for them to pair up with current company leaders to be groomed to rise in the ranks. Further, allot extra responsibilities for these professionals, or have them sit in on significant meetings.
Not only will these professionals benefit and rise to their potential, the organization will have an opportunity to seamlessly prep internal talent for greater responsibility and avoid being empty handed when current leadership exits. Reality based succession planning is a business function that is rapidly growing in importance as turnover rates remain high. Does your organization include succession planning among human capital strategies?
Cindy Lubitz is Managing Director of inTalent Consulting Group