There’s more to succession planning than coming up with lists of candidates for important positions on the back of a cocktail napkin.
Unfortunately, that’s about as far as some companies take it (if they’re doing it at all). Then they end up scrambling—looking for replacements, hiring overly paid and risky outsiders, or over-promoting unqualified candidates.
I’ve been studying succession planning best practices for years. The companies that do it right—as measured by bottom-line results—seem to follow these 10 best practices.
- Have commitment and involvement of the CEO and Board. Succession planning not an HR-driven paperwork exercise; the CEO owns it, and has regular reviews with the entire Board or a Board subcommittee. Board members contribute to the process by providing feedback, asking great questions, and holding the CEO accountable.
- Have regular talent reviews. The Board reviews talent with the CEO, the CEO reviews talent with the executive team, each executive team member reviews talent with their teams, and the process cascades down throughout the organization. A wide net is cast for rising stars and poor performers are dealt with.
- Only identify viable successors for a handful of key “C level” positions. They identify “pools” of high potentials for the top levels of the organization that can be developed for positions that may not even exist today.
- Take a “pipeline” approach to development, with the identification and development of talent at ALL levels of the organization.
- Hold the executive team accountable. They measure key activities and results, and often tie it to executive compensation.
- Align with business strategy. They “connect the dots.” More important, they can clearly articulate the business case for doing succession planning (or the consequences of not doing it).
- Manage the irrational, political, and emotional dynamics of succession. Ask anyone who’s ever been in the thick of a succession planning program, or talk to any CEO that’s faced with the prospect of “letting go.” It’s not for the faint of heart, and can’t be overlooked. This is the stuff that you won’t find in a textbook, but comes with experience and emotional intelligence.
- Assess performance and potential. They don’t gamble on past performance as a predictor of future success in a new role. That’s a high risk bet. They use a variety of effective ways to assess potential with relevant, consistent criteria.
- Integrate succession planning with performance management, recruitment, selection, development and rewards. It’s not some super-secret process done in isolation in a smoke-filled room.
- Make a serious commitment to development (time and resources). Succession planning without investing in development is nothing but a useless exercise in futility. The best companies spend more time developing candidates than they do creating lists.
So no one’s perfect. Where are your biggest opportunities? Where is the best place to get started? What’s one thing you can start doing now?