In the first part of this Succession Planning series, we explored the pitfalls associated with a lack of succession planning. In part two, we look at what executives and boards can do to implement a succession plan, nurture internal talent and discover future leaders.
In 2022, demand for executives who exhibit agility, accountability and understanding of how to develop diverse, inclusive workplaces, implement sustainable climate-change focused practices and employee-centric cultures is increasing. Although traditional skills such as delivering strong commercial performance remain crucial, better soft skills and innovative thinking are critical areas of focus for boards and executive teams looking to identify potential executive successors. The following suggestions can help business leaders get started with succession planning or refine existing ones.
Rapidly shifting industry trends, economic recovery and stabilising growth is creating movement at the executive level as organisations pivot having focused on recovery. The organisations that are prepared, with a structured succession plan will be best placed to navigate sudden or unexpected changes in leadership.
The market for top talent is increasingly competitive. To stay ahead, companies need to establish leadership development programs that can help them identify and prepare a range of internal leadership candidates for potential executive roles.
Fresh thinking and a modern approach to executive succession planning that extends beyond traditional skills matching and encompasses DEI, sustainability and commercial considerations are paramount for driving innovation and growth. Organisations need to give consideration to a broad range of potential internal and external candidate pools, not only for permanent and interim executives to ensure they can cover a variety of scenarios but to explore a broad range of perspectives, thinking and skills. This helps boards establish a clear profile of the qualities and attributes that are necessary for future success.
Investment in robust, effective and supportive onboarding and transition processes are of paramount importance. With so much at stake, few companies can afford for executives to fail in their new roles, especially given the impact executives can have on business performance and success. Arguably, quality onboarding and transition support and processes are more important for executive appointments, especially since Only 27% believe their organisations provide the necessary resources to support their move into a C-level role according to McKinsey. Compounding the issue, McKinsey found 50% of leaders reported that it took them six months to become effective in their new roles.
Ensuring that executive transitions are controlled, thorough and collaborative is key. Providing new executive appointments with access to critical information, organisational methodologies and supportive board members can greatly reduce the time it takes for them to become effective in their new role, creating a win-win scenario.
Successful succession programs should be part of wider leadership development and talent management plans. Treating succession as a short-term need, rather than a long-standing, structured process denies organisations the opportunity to start developing future leaders early in their employment.
Two key steps to developing potential future leadership talent early are talent assessments & leadership development plans. Discovering the competencies, skills and gaps of your existing employees through talent assessments and benchmarking those against the critical skills needed for executive positions can help identify candidates who demonstrate the highest potential for future leadership roles.
Career development plans can then be created based on the skills required for success in the role, anticipating the future needs and goals of the organisation.
Organisations that develop the best leaders create executive succession plans that include selection criteria based on the future needs of the business. These criteria are often based on performance forecasts, future direction and anticipated market conditions hence the need for continuous refinement and adjustment of not only the assessment criteria but the skills required of future executives.
Incorporating flexibility for adjustment in succession plans, career development plans and selection criteria help organisations remain current and future-focused.