Succession Planning: Why It Seems Easy but Is Hard to Do Well

Quality succession planning is not rocket science so why do so few companies do it well? The foundational reason is succession planning is a classic example of, “important, but not urgent work.” In today’s hurried and distracted world, important urgent things take first priority followed by a slew of unimportant transactional noise. Most firms lack the discipline to focus on important work that may not pay dividends for months or even years. Succession plans don’t become urgent until you receive that unexpected call that a key leader is resigning in a matter of days and you haven’t thoughtfully planned for her departure. As a HR leader there are few worse feelings then anticipating the dreaded phone call from the CEO asking you who do you have on the succession plan knowing that the succession plan lacks any credible successors. On the contrary, it is an incredibly comforting feeling when you know you have two or three candidates who could be even better than the incumbent.

What gets in the way

In order to create quality succession plans, we must first fully understand what gets in the way:

1. You reap what you sow. If the right operating leaders aren’t investing quality time in the succession planning process, then you will never “get out the gates.”
2. Lack of understanding of future requirements. We tend to look at what was required to be successful in the past rather than doing the harder work of looking at future requirements.
3. Failure to prioritize mission critical roles. All roles are not created equal and quality succession plans need to have a laser focus on the firm’s most critical roles.
4. Leaders possess a “scarcity” rather than an “abundance” mentality when it comes to talent. They become overly possessive of “their” best talent constraining the flow of potential successors to developmental roles thus inhibiting essential experiences necessary to get talent ready for the next level.
5. Not enough dialogue with potential successors. Succession planning must be an interactive and ongoing dialogue with key talent. For a multitude of reasons, most organizations simply don’t engage enough with key successors.
6. No metrics. Organizations pay attention to what gets measured and if you lack metrics then you will have episodic or superficial attention applied to a process that feels more like an annual compliance exercise.

A framework to get you started

What does it take to overcome the barriers and create a value accretive succession planning process? The following is a framework that can get you started:

1. Contract with key stakeholders on designing a framework for execution including measurable deliverables along with clear roles and responsibilities. HR leaders play an important role; however, operating leaders must also engage regularly.
2. Establish a non-negotiable operating rhythm that is woven into the broader operating cadence of the company. The operating process should culminate with regular reviews with the Board of Directors for CEO and Tier One leadership roles.
3. Start small. Pick the highest value roles in the organization to focus on first before moving on to the next batch — if you go too broad then the process will die of its own weight.
4. Engage with successors in the context of career development and preparing them for future roles. The simple act of conducting career discussions with key talent (both internally as well as externally) will pay dividends well beyond a credible succession plan. Once successors are identified, you can provide them with visible project assignments and exposure to the CEO and Board as clear signals to them and the organization relative to their future potential.
5. Establish metrics that give visibility to the robustness of the plans and the “hit rate” on staffed roles. A sound metrics package can also provide insight on important topics including diversity and key skill and experience gaps.
6. Hold leaders accountable for credible succession plans in the same manner you hold them accountable for financial results. If you sharpen the consequence system, then leaders will pay attention. Otherwise, you can add succession planning to the “nice to do” heap that never gets the attention it deserves.
7. Close the loop. Regularly brief key stakeholders on progress with a real focus on intellectual honesty regarding where you stand rather attempting “to spin” your way to a good review.

The above framework executed well will lead to higher quality and faster staffing of key roles thus significantly reducing the risk of “key-person” departures. Moreover, engagement with successors will lead to higher retention rates and more optionality to staff roles with internal talent. Succession planning truly can be a virtuous cycle where small investments of time on an ongoing basis can pay dividends for years to come.

If you are weighing a succession decision and want an objective read on whether a candidate is ready, that work sits inside our Executive Readiness Assessment. Start a conversation.