In the average organization…
- The 10-person Senior Leadership Team will lose nearly 2 of its newly appointed executives in the next 12-18 months.
- The business will pay (excluding additional cash comp) between $710,000 – $1M+ to hire replacements for them and that figure is expected to increase.
- Exiting executives leave with an intricate knowledge of your strategic plan, competitive positioning, and approach to differentiation.
- You likely have no formal succession planning process in place and don’t understand its significance in total company success.
And perhaps counter intuitively, we believe that the first three bullets are symptoms of the last. Average organizations tout today’s talent as their greatest asset. The best organizations use succession planning to safeguard their current business as well as ensure its future success. We believe the work of managing, anticipating, and planning leader transitions (both expected and unexpected) will guarantee you beat the odds and have the talent you need to realize the future you want. Why?
People bring strategy to life.
A good strategy is formed at the intersection of market needs and an organization’s capabilities to meet those needs. Leadership is one such capability that will make or break your strategic aspirations. When leaders exit the business or transition to new roles it puts that capability in jeopardy. Organizations that believe the leaders who bring their strategy to life can literally “walk out the door anytime”, rely heavily on succession planning processes.
- Instead of getting hammered by analysts, succession planning shows the Street they can count on your top-of-house leadership well into the future.
- Instead of hemorrhaging market intel, industry expertise, and longstanding customer relationships, succession planning ensures knowledge transfer to emerging leader populations.
- Instead of betting on emerging markets and learning you have no leadership in such markets, succession planning gives your organization the foresight about the capability before needing it.
- Instead of overlooking internal talent for external expertise, succession planning takes a look across the business to know where existing talent could be leveraged more strategically.
Your organization benefits from succession planning only when it is directly tied to the current and future, strategic requirements of the business. Business leaders benefit from this work because it ensures they have the people they need to realize the objectives they committed to.
The work is future-focused, now.
Time and again, we get called for succession planning support only to find out the incumbent is exiting, “next month”, or that they have, “already exited”. That’s talent triage, not succession planning.
Succession planning ensures every leader you’re betting the future on, has two or three leaders behind them who know what in-role success looks like and how that will change in the next 24-36 months. It also ensures those leadership transitioning out know what they are transitioning to, why and what will make them successful when they arrive. Furthermore, it does away with the, “ready now” label because successfully transitioning to a future role always requires development. The transition is often a precedent (e.g. promotion or lateral move) and in-role success always evolves from potential successor evaluations to the time they assume a new role.
- Instead of believing low attrition scores justify not doing the work, succession planning assumes that all leaders will eventually move on and prepares for that even if they don’t.
- Instead of keeping an incumbent in role longer than necessary, succession planning normalizes and fosters conversations with would-be retirees and thoughtfully plans for their exit.
- Instead of getting caught off guard by the proverbial bus scenario, succession planning has you anticipating such transitions before they actually happen.
- Instead of replicating past work and success, succession planning challenges the organization to think about the future of its work and the way success in-role must evolve in the coming years.
Succession planning is an organizational asset when it is conducted in advance of the need and considers the future of that need. Business leaders benefit from this work because they take a longer-range, more realistic and evolving view of their talent and thus accelerate their ability to perform during talent transitions. Everyone benefits from the development required for transitioning leaders’ in-role success.
So you get it. What’s next?
If your organization is average or just “checking the succession planning box”, we’d encourage you to reflect on the ways your current and future success depends on effectively transitioning leaders. Jot down an example where a leadership transition could catch your organization off-guard and jeopardize its ability to meet strategic/future requirements. With that example as a backdrop…
- Build the business case for succession planning and contextualize the opportunity and risk for your organization. Leverage the research and use your organization’s financials to contextualize the business case. What will it cost your organization to plan poorly or not at all? Detail the financial and non-financial cost to your organization.
- Prioritize where to cut in, especially if you’re starting from scratch. Not all work is equally important to your strategy; thus, not all leadership positions require equal succession attention. Start with the most strategically significant roles and work out.
- Don’t go it alone. You’re likely not the only leader who feels the disconnect between strategy and planful leadership transitions. Discuss it with like-minded leaders. Have them kick the tires on your assumptions and strengthen the business case. Ensure there’s Business/HR connectivity throughout.
Whatever you do, start now. The power of succession planning is that you do it before you need it. Pain can be a great impetus for change, but capitalizing on the time before a transition that ensures all the value the work can truly afford.