Today’s society seems to be on an insatiable search for the next big thing, from the next binge-worthy TV series to the next superfood. But recent research by Korn Ferry reveals many organisations aren’t paying enough attention to the next big thing inside their own walls: their next CEO or CFO or CHRO.
An effective succession management plan is critical for any organisation. It’s a way of ensuring you have the right talent in the right place at the right time to activate, drive, and execute your business strategy. But according to our survey of c-suite executives in companies across the globe, there’s a major shortfall issue. Three-quarters (77 percent) of the respondent group, which included CEOs, CFOs, CHROs, CMOs and CTOs, said there isn’t an internal ready-now successor for their role. What’s more, nearly half (42 percent) said their organisation doesn’t have a comprehensive succession plan for their role.
Short-term goals hinder long-term planning
Here is another consequence of the disruption deluge: Organisations are so busy trying to outpace the competition and provide value for customers and shareholders that they don’t take the time needed to plan for the future. This leaves many organisations vulnerable should a senior leader unexpectedly leaves.
The story is consistent across the full range of c-suite roles we surveyed:
|Role||Percent who say there’s not a ready-now successor for their role||Percent who say there is a comprehensive succession plan for their role|
|CEO||76 Percent||40 Percent|
|CFO||80 Percent||38 Percent|
|CTO||71 Percent||41 Percent|
|CMO||84 Percent||41 Percent|
|CHRO||76 Percent||52 Percent|
While replacing any senior leader takes careful planning, the responses of the 222 CEOs we surveyed should give organisations particular pause. Identifying and developing a CEO who can drive performance and transformation doesn’t happen overnight, yet just 40% of the respondent CEOs reported that a succession plan for their role is in place.
“The process for identifying and developing the next CEO and other leaders for the most senior positions should not stop, even when a new CEO takes the helm,” says Gareth. “In today’s disruptive environment, an organisation’s strategy can change quickly, and this can impact the key requirements for leadership success. The development process, including tracking the readiness and growth of the senior talent pool, cannot afford to take a break. The board and CEO should look to refine the criteria but not interrupt the process itself.”
Elevate succession planning
Developing a pipeline of leaders ready to step up when required takes consistency, accountability, and a systemic approach. Succession must be intimately connected to the organisation’s strategy, not merely sit alongside it. It must not only reflect the attributes required for success based on the organisation’s strategy but also provide a clear picture of the actual state of their talent’s true readiness. Anything less risks turning the succession process into a game of chance (at best) and a barrier to growth (at worst).Developing a pipeline of leaders ready to step up when required takes consistency, accountability, and a systemic approach. #successionplanning Click To Tweet
Often, succession plans also suffer as a result of ineffective implementation. It’s common for many organisations to struggle with leaders who have been on the succession chart for years and whose development lags as a result. Likewise, when a position opens, it can often go to a candidate who is not on the succession chart, creating disruption not only to the business but to teams, culture and morale.
Three steps to effective succession management
Having a steady stream of “ready now” leaders is the ultimate goal of any succession management plan. These three steps will help to ensure your organisation’s succession plan delivers the leaders your organisation needs when it needs them.
- What leadership talent do you need?
A succession plan will only be effective if it’s closely aligned to both the talent and business strategies. It must isolate and evaluate the key skill requirements required to deliver on the strategy
- What leadership talent do you have?
The succession planning process should be continually active, offering insight into the critical leadership strengths and gaps across the organisation and guiding development plans.
- How do you close the gaps?
Building a pipeline of ready now leaders requires a coherent, formal process for evaluating internal and external talent, not just once but on an ongoing basis.
At the end of the day, a succession plan is only as good as what it delivers. What really matters to the CEO and board of directors is not the succession process itself, it’s ensuring that succession produces the leaders they need to take the business where they want it to go.