Practical Succession Planning

Practical Succession Planning

A classic succession plan is an evaluation of key executive talent within an organization to determine who can (or cannot) assume greater responsibility in the future, what type future positions they can successfully hold and what experiences or development is needed to get them to that next job.

The purpose of such a plan is to maximize the utilization of executive talent, to minimize the risk to the company in the event a key executive departs and to identify impediments to executive or manager future promotion. Every “key” company manager should do, or be part of, a succession plan.

Succession planning is much like strategic planning. It can be an infrequent exercise that seemingly gets in the way of tactical priorities. As a result of the effort, a detailed evaluation and plan are produced and then may be put on the shelf and lost to history. So, when it is really needed, it is dusted off and used (if not already out of date). Of course, some companies and Boards do this better than others.

So what makes for an effective and practical succession plan that doesn’t end up sitting outdated on a shelf at headquarters, and is ready when really needed? We think three planning and decision-making practices will help.

1. Keep your plans fresh by getting “two for ones.” Link executive performance evaluations directly with succession planning. In our opinion, the most important element of any performance evaluation revolves around answering the following  questions about the executive or manager (or any employee)—

  • What is the next job to which they can be promoted (1st step), and when will they be ready?
  • What is the potential second job to which they can be promoted—after the 1st step (the 2nd step) and again, when will they be ready?
  • What should be done in the next 12 months to get them to that next promotion and beyond?

Now I am about to give heartburn to my HR friends, but most of the performance appraisal process (I used to call is green-paper time for the color of the Gould, Inc. forms) is generally nothing more than an administrative rationale for giving the incumbent the raise you want. But asking these three questions will change all of that.

Gathering this information yields a well-documented succession plan—without all of the pretty binders and big words. And, it is updated (automatically) each year. Call it your annual succession plan.

2. While creating your annual succession plan, do not be afraid to just say No. Resist efforts to rush candidates into that “next job” or to a place where they are needed to fill a gap today. Your first reaction (and response) should be “No.” Then take some time to consider what it will take for the incumbent to be ready. The organization will generally not come to a halt if a single box on the organization chart remains empty for a few months.

Avoid the risk that:

  • The incumbent will not be able to get the job done without much intervention from above; and/or
  • A promising career can be ruined or set back by a premature promotion.

Of course in reality no one is ever completely ready to move to the next step. So while you should be cautious, there must always be a day to fly solo. I had to solo, didn’t you?

3. Be careful when looking in your rearview mirror. I am sure you have all been in a situation where your boss has asked whom (amongst your staff or direct reports) could do your job if you were run over by a truck. [By the way, has there ever been a recorded case of a top executive being run over by a truck?]

Your first response may be to bypass a strong business generalist or two to choose the candidate with the strongest (say) marketing background—perhaps much like yours. But wait a minute, you might be looking backwards! What if the company’s future strategy demands someone with a background and experience quite different than that has been needed in the past to lead and grow the firm—say those generalists you just bypassed?

Perhaps it would be better to hire a new top-marketing executive and not look for an exact replacement (clone) for you. Look to the needs of the future company when choosing a successor, and do not be afraid to question (or abandon) the talent model to which the organization has become accustomed.

In closing if an executive cannot identify a qualified successor and outline what it will take them to get there, the Board or CEO may be very reluctant to promote that executive. Pure self-interest suggests that succession planning is the first thing an executive should think about every morning.

Do not be that executive. Start by adding three simple questions your company’s performance appraisal form (and process) this afternoon. Tell HR later.

Share this!