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CTDO Magazine

What Succession Plan?

Friday, September 15, 2017

Building a strong bench for the future proved challenging because leaders didn't believe in the process.

Mitigating risk is more important than ever in corporate America and that is particularly true for financial services. Talent management makes an important contribution to risk mitigation by ensuring a stable leadership team with the appropriate skill sets to take a company into the future. Robust succession planning is the tool that can prepare us for the future.


About 10 years ago, I learned that the succession planning process was met with skepticism and impatience. Leaders felt the once-a-year process was laborious and a waste of time. Once the plans were completed, more often than not they sat on the proverbial shelf only to be taken down when the next annual cycle kicked off. The succession plan was considered confidential, so successors on the plan did not know they were on it.

Time is precious, and wasting people's time was something I was not keen to do. But ensuring we had a strong succession plan was critical, so I needed to find a way to make it a living plan that was relevant and understood by our leadership team.

I started with understanding the status quo and asking many questions. The main questions were: How many of our vacant roles were being filled by individuals identified in our succession plan? How often did we even use the succession plan when a vacancy opened up? Did we have insight to when a role would be open? If so, did we know our successors well enough to ensure they were ready to take the role? And finally, did our plan reflect the skills and diversity that we wanted our future senior team to have?

The answers were disappointing. Less than 30 percent of our leadership roles were being filled according to our succession plan. We knew very little about the people identified as successors and, therefore, too often the successors we had on the plan were either not ready or not available when a role was vacant. And in way too many instances, our recruiters did not look at the plans when they prepared their search strategy for a vacant role.

My conclusion: We needed to transform how we plan for the future.

A plan for the plan

I started by changing how my team used the plan. In essence, I needed to clean my own backyard before I asked the rest of the organization to change.

I created a forum where the talent management team and the recruitment team came together to go over executive roles that needed filling. This forum pushed us to at least look at the succession plan to consider any previously identified candidates for that search. If there was a good match, we investigated if the hiring manager would consider those successors and if so, if the successor was interested in the role. Brilliant innovation in talent management, right? Hardly. This is obvious stuff—being sure that the different parts of HR are talking.

Another challenge: Because there had been no transparency about the succession plan, the successors often were either not qualified or not interested. So, even as we established a good habit of going to the plan first when a vacancy opened, we still needed to build a realistic plan. That was our next step.

When the next annual refresh occurred, we built communications about the importance of the plan and identified weaknesses. We highlighted the roles we anticipated to be filling soon. We added some targets for numbers of successors. We reviewed our slate of employees who were rated as high potential and added them for consideration for the succession plan. We provided insight to where the plans lacked diversity. These questions allowed conversations to begin that really challenged how the plan was created.

The good and the bad

The plan became more workable and rooted in reality. Our talent management and recruitment forum scored more successes in matching vacant roles to realistic internal candidates. Our ability to fill roles from the succession plan moved up to around 50 percent, a 20-point jump in a single year. Progress was being made, but we still had a ways to go. We turned our attention to improving the readiness of the successors.

To kick this off required convincing our leadership team that transparency was good. Letting people know they were featured on the succession plan enables them to build development plans that accelerate their readiness to take the role. Some leaders were skeptical of this approach. There were understandable and well-intentioned concerns that if you told someone they were a successor and then when the job opened up and that person did not get the job, there would be hard feelings for the individual and angst in the organization. It was important to coach leaders to have that tricky successor conversation—to deliver the message that successors are potential candidates, and there would be other candidates considered as well.

This transparency really kicked the plan into high gear. Our rate of roles filled from the succession plan went up to 83 percent. Succession planning was now gaining a good reputation as a living tool of strategic importance to the long-term success of the organization.

That was the good news.


The bad news was that our progress was at risk of being undone by our success. Our leadership team started to plan for so many roles that our ability to know which roles were strategically important was diluted, as was our knowledge of the successors and our support for them through robust development plans. So, I learned another lesson: Do less and do it better. Thus, we sharpened our focus on the most critical roles—not all roles.

Continued improvement

Today, we are doing much more robust succession planning and having better conversations about our talent. The dramatic improvement in filling roles from succession plans has plateaued, but that's as it should be. We don't want to do much better than 83 percent because we do want some external successors in our plan. What's now become significant is that we have much greater visibility to our internal talent, their readiness, and their professional aspiration than we did 10 years ago.

It's working. However, I still see areas in need of attention. While we are pretty good at understanding our most critical roles right now, we could be even better if we had a better handle on the critical roles of the future. As our workforce changes with technology, artificial intelligence, and a global economy, we need succession plans that fill our talent pipeline with the leaders we will need soon.

We still need to know our talent better. We need to do more to squeeze out unconscious bias when identifying successors. We will need to continue to have courageous, complex, and sometimes difficult conversations about the diversity of our leadership team. And there's more to be done in getting our leaders comfortable with transparency, because leaders who are comfortable are much more successful in knowing their people, understanding the readiness of the successors, and putting development plans in place to get their successors ready.

Finally, we need to improve how we market development opportunities to them, to better provide targeted employees with the experiences, programs, and roles.

As we strive to continued improvement, we'll apply these lessons:

  • Critically assess the roles that need a succession plan. Make it robust yet manageable.
  • Incorporate everyday performance management into the succession planning. Let people in on the succession plan so they know they are considered a possible candidate for a future role.
  • Make career development easier on everyone. We have not solved this yet. We need better ways to match the right opportunities to the right talent at the right time. We are getting better, but aren't yet where I want us to be.

Read more from CTDO magazine: Essential talent development content for C-suite leaders.

About the Author

Terri Pearce is Executive Vice President, Human Resources of HSBC North America Holdings, Inc., a wholly owned subsidiary of HSBC Holdings plc, one of the world’s largest banking and financial services organizations. In this role she is responsible for developing and directing learning, talent, resourcing, and organizational development for HSBC North America in alignment with HSBC’s Group office in London. She also directs talent management and succession planning across HSBC North America. Terri joined HSBC in 1988, and held HR and operations roles both on and offshore. Terri received her bachelor’s degree in psychology from Vanderbilt University and has an MBA from The University of Phoenix. She holds the SPHR credential, and is a member of the Society for Human Resource Management and the Conference Board Council on Learning, Development and Organizational Performance.

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