Succession Planning
Learning and development may do the most to accelerate the next generational leaders, but it is difficult to know where to focus an organization’s investment without proper succession planning processes. However, in a joint initiative by IBM and American Society of Training and Development in the summer of 2006, they surveyed 239 learning executives, 83 percent of whom resided in the United States, and found that “…just over one-quarter of companies has plans in place to address positions that are potentially at risk due to a maturing workforce…these statistics suggest that many organizations remain unprepared.”1 In a similar study, Achieve Global surveyed “144 respondents with the title of vice president or higher [who] shared their insights on their organization’s succession strategy. Results show that the majority (51 percent) currently do not have a succession plan in place for C-suite executives—positions that include chief executive officers, chief financial officers, chief operating officers, etc. This is particularly troubling for American businesses, as 16 percent of respondents also indicate that they have an existing vacancy in their C-suite and another 37 percent indicate that they anticipate a vacancy within the next year.”2
With the generational parade marching forward and some companies expecting as much as 70 percent of their workforce to exit in the next 10 years, it is time to get serious. “Succession planning is the fastest and cheapest way to get a well-qualified person into an open position.”3 As Peter Drucker said, “There is no success without a successor,” and since no one wants to be a failure, the time is now to prepare for the future. And, “as boomers leave their careers, employers can expect fewer qualified candidates to fill open positions. Organizations will be scrambling to move many of their current employees up into the jobs that Boomers will retire from, thus creating openings in the lower levels of many organizations.”4
So, what’s the problem you ask? Well, we should probably take a few minutes to talk about exactly what succession planning is, and then we’ll cover why it is that more companies are not prepared in this area. There are a few elephants in the room that we intend to discuss, so if the idea of succession planning makes you squirm, prepare yourself.
Definition
Succession planning, according to Wikipedia, is “a process for identifying and developing internal personnel with the potential to fill key or critical organizational positions.” It ensures the availability of experienced and capable employees who are prepared to assume these roles as they become available.5 When done well, organizations conduct formal succession planning processes where they
• identify mission-critical positions throughout the organization;
• establish an in-depth understanding of the position from the incumbent;
• locate internal talent that has the “potential” to step in or be developed enough to eventually hold the position;
• gather as much information as possible about each candidate including résumé, annual reviews, 360-degree survey feedback, coaching and mentoring notes, etc.;
• hold talent review sessions—facilitated meetings with the incumbent and his/her peers and key constituents for the position—to discuss the position and potential successors to identify strengths and development areas for each candidate;
• work as a team to prioritize the list of potential candidates in terms of their readiness to fill the position;
• settle on the final list that is turned over to the HR Department where the information is entered into a talent management software for easy access and also given to a talent management professional to begin the process of helping each potential successor move forward in his/her development;
• have each candidate work with his/her boss, a mentor, and a talent management professional to map out an individual development plan with goals, action items, and timelines;
• meet periodically to assist and monitor progress of each potential candidate until the next talent review session.
Ideally, at the next talent review session, each candidate will have progressed. If they were “ready in 3 years” last time and 2 years have passed, they should now be “ready in 1 year” to fill the critical position.
The talent management and HR roles mentioned above can be covered by external experts or other internally assigned professionals who have been trained in the processes.
Seems basic and maybe even a little boring. So why would companies or, more specifically, company leaders neglect (cough… cough…avoid) succession planning? Well, let’s just say, it can get a little sticky.
Remember that most of today’s leaders are Boomers, so they are the incumbents for these critical positions. They worked hard to become the king of the mountain, and one big issue is that they don’t really want to think about someone else becoming the king of the mountain. So this is a big elephant in the room that no one seems to want to talk about. For one, talking about someone else taking their hard-earned position may diminish the Boomers’ sense of relevance and for two, they are king of the mountain. Do we need to say more? Well, we will anyway. On top of the fact that they are king of the mountain, it takes an investment of both time and money to do succession planning well.
When done properly, succession planning is not just something that is done for the C-suite; it is done for every critical position and then planning is cascaded down through the organization as each promotion creates a vacancy below it. This is often called filling the leadership pipeline. It is one of the best ways to ensure that the organization is able to move forward progressively and to make provision for the organization’s intellectual property and core knowledge content to stay in the organization and stay current.
In addition to time and money invested, succession planning is an emotional investment for the incumbent. He or she has worked long and hard to be king of the mountain and usually has a long list of scars and medals (plaques) to show for it. When we engage incumbents in succession programs, they often provide very in-depth résumés, job descriptions, etc. It is a part of who they are, and for the Boomers, it may be the biggest part of who they are. It is like preparing for their funeral and has many of the same fears—loss of significance, loss of control, and potential regrets. Remember, Boomers are the ones who set out to change the world, often becoming workaholics in the process. So, the Boomer leader is happy to tell you how he or she made it to the position and how important the position is, but he or she is usually a lot less happy to tell you what you need to do to be ready to “take” the position. It’s a threat to who they are. Besides, what if he or she wants to work until the age of 70? Is that going to be a problem? Boomers often say that they have no plans to leave. We are not sure that they have no plans to leave, but they certainly have no plans to “tell” others when they are going to leave. Unlike Gen Y, Boomers hold their cards close to the vest and do not tell what they know just because they were asked or because it can now be posted on Facebook.
We’ve also found that when we press some reluctant leaders on why they are not establishing a successor for their position, they say they don’t care who takes the position when they leave. Of course their boss or their board are nowhere near when this is being said, but at least they are honest. It certainly would be great if every senior leader understood the importance of succession planning and took accountability for his or her position by making sure all of the appropriate processes were completed and potential successors in development, but as you saw from the statistics, it often isn’t done at all. Ultimately the board of directors should be the ones to insist on both a formal succession plan and the appropriate development processes for potential successors. With more and more boards being held responsible when companies get in the hot seat, this is one area where they can easily insist on appropriate processes.
Sheldon Adelson once said, “Why do I need succession planning? I’m very alert, I’m very vibrant. I have no intention to retire,” and many Boomers are saying the same thing, but succession planning is about so much more than retirement. It is about preparation, sustainability, and worst-case scenarios. The movie Gifted Hands is a true story of world-renowned neurosurgeon Ben Carson, M.D., who performed the first successful procedure to separate a pair of seven-month-old conjoined twins, who were joined at the head. Carson was the lead surgeon of the 70-member surgical team that performed the complex procedure. Before the actual procedure, the team practiced the procedure over and over again. They had duplicate equipment, generators in case the power failed, and every imaginable precaution. They also had worst-case scenario plans in case one of the children died and the other didn’t. The plan was meticulous, and it worked. Yes, something could have gone wrong and one or both of the children could have died, but because of their relentless preparation and their expertise, the chance of failure even through a risky transaction was lowered significantly. In this case, a lack of such planning would have certainly ended in the death of one or both of the children. Without the surgery, the children would have never been able to advance along with their peers. In many ways, they would have been stuck, unable to move into a productive and successful life.
If we look at our organizations in a similar light, it is often necessary to take on difficult and even risky business transactions such as a new product or service line, an acquisition, a merger, a divestiture, etc., in order to sustain or grow the company to the next level. During such organizational moves, leaders are often under intense pressure. Sometimes leaders fail, quit, or are moved out when the pressure is intense. Organizations need to be just as prepared to sustain the life of the organization as Dr. Carson and his team were prepared to sustain the life of the children in the now-infamous surgery. Succession planning is about preparation, sustainability, and worst-case scenarios for your organization.
Now if we can convince the Boomers to do the hard work of admitting that they are not always going to be king of the mountain, we must then tackle the Gen X factor—Gen Xers, for the most part, are not prepared, and this is our other elephant in the room.
While the blame can be squarely placed, knowing where to squarely place it is another story. It’s definitely the Boomers’ fault that Gen Xers are not prepared. The Boomers are playing keepaway from their younger siblings and protecting their own cushy executive seats. But we can also definitely blame Gen X. They have been so busy demanding to take their dogs to work and leaving work as fast as possible that they haven’t prepared themselves. And then we can probably also blame the Roaring 90s for just distracting us all with all that money to spend on big ole mortgages, vacation homes, boats, toys, iPhones, and a million other things we really didn’t need. After all, who could pay attention to the generational parade when the view in the store windows was so much more attractive? No matter where we want to point the finger, we are where we are and there’s no better time to get started preparing for both survival and success.
Notes
1. Lesser, Eric, and Ray Rivera. “Closing the Generational Divide.” IBM Global Business Services: Human Capital Managment. In Association with ASTD, July 2006. Web. https://www-935.ibm.com/services/us/gbs/bus/ pdf/g510-6323-00_generational_divide.pdf.
2. “Is Lack of Succession Planning Negatively Impacting Your Business?” Achieve Global. 18 Nov. 2008. Web. 24 July 2010. http://www.salesandmarketing.com/msg/content_display/ training/e3i2dd2f2ead332946a2c2c74b79091224e.
3. Wheeler, Kevin. “Recruiting and Succession Planning: Three Tips on Getting Involved: Global Learning Resources.” Global Learning Resources, Inc. 22 Aug. 2003. Web. 24 July 2010. http://www.glresources.com/132.html.
4. Lieber, Lynn. “Capitalizing on Demographic Change and the Global Workforce.” WPA in the News. Workplace Answers, 1 June 2009. Web. 24 July 2010. http://www.workplaceanswers.com/Company/News-Events/WPA-in-the-News/ Capitalizing-on-Demographic-Change—Preparing—(1)/.
5. “Succession Planning.” Wikipedia, the Free Encyclopedia. Web. 24 July 2010. http://en.wikipedia.org/wiki/Succession_planning.