Where Does Your Company Stand with Succession?
The squeeze for talent is putting an equally tight squeeze on business succession planning.
Creating a blueprint for change is the primary task of any succession plan. Whether it is a large organization or a small family business, knowing what—and who—comes next is a big part of business planning.
A short list for the C-Suite is not the only focus of a corporate succession plan. As the average tenure of skilled talent drops to just over four years, HR needs an overall frame to approach leadership training and workforce succession.
Leadership planning is a big part of business sustainability
Your dynamic head of R&D just got an offer they cannot refuse. Leaving with two members of their team, you now have a problem beyond just filling positions. Institutional knowledge and continuity are significant aspects of organizational culture. An effective succession plan ensures carry-through of knowledge and stability when key players exit the building.
Being prepared for change puts you one step ahead when a manager or leader steps down. Recognizing and nurturing leadership capabilities throughout your workforce helps you stabilize the landscape when positions open or different types of leadership are needed.
If corporate, department, or team succession planning is not where you think it should be—consider these points to get your workforce aligned with the future:
- Are you ready for change? Many companies do not have a succession plan in place at any level. When a leadership change-up does occur, most companies still tap insiders for high-level management positions. Despite that majority, a Price Waterhouse Cooper report identifies a growing tendency of companies looking to outsiders for key leadership capabilities. In the same report, statistics show women stepped into less than three percent of CEO positions in 2015.
- What kind of training works best? While an MBA is often a baseline qualification for a leadership path, internal leadership development programs yield candidates familiar with your operation, brand, and planned future state. Leaders, managers, and team leaders developed from within are familiar with company culture. Aspects of leadership training might include working with older or experienced personnel, rotation throughout the company, project-based work, and other assignments that give talent the opportunity to accept challenges and develop leadership skills.
- Planning: Leadership planning represents different things to different business interests. The dynamics of leadership in a mid-size family-held business differ from the needs of a global enterprise. So—context is important. When considering succession, define goals, and lynchpin positions or programs. Succession planning is often a component of long-term strategic planning. Develop leadership planning to support organizational vision.
Instead of grooming a cadre of executives for leadership positions, consider reaching into the ranks for passionate, skilled talent who excel at their position, seek challenge, and would benefit from the opportunity to initiate and innovate. Develop leadership from within by identifying bright talent already familiar with your brand. Position these people with other experienced workers to gain full-scale understanding and proficiency with aspects of your organization.
Equip those individuals with competencies you have identified as essential to your future vision. Ensure you choose individuals with differing talents as leadership is not one size fits all. An employee gifted with growth through merger or acquisition is not going to be the same employee driving growth through internal reorganization.
- Get practice: A Harvard Business Review (HBR) article encourages companies to give their identified future leaders a chance to lead, noting…”By providing a platform for employees to fulfill their individual potential by finding profitable solutions to big problems they care about, [the company] developed leaders from within and retained them.”
The best leadership development program is one that identifies, nurtures, and retains talent at all organizational levels of your company. Engage management personnel throughout the enterprise. Your future leaders, defined by HBR as “purpose-driven employees,” may already be on your payroll. Develop meaningful metrics to gauge effectiveness, success, and leadership impact.
Change happens. Succession plans are essential to your company lifecycle and speak to the ease with which your business can move forward when challenged by the unexpected—and the expected.