It’s become something of a cliché to ask what’s keeping CEOs awake at night. But if you were to analyse the 3AM thought patterns of business leaders it’s fairly likely that the talent crunch would feature prominently: a new LinkedIn study found that 80% of CEOs are worried about the availability of key skills.
And CEOs should be worried. Our research forecasts an imminent talent deficit of more than 12.3 million workers by 2020, rising to a shortage of 47.0 million workers and $4.238 trillion in unrealised annual revenue across APAC in 2030. Add to this the World Economic Forum predictions that 35% of the skills that are important today won’t be in five years’ time and you truly have the stuff sleepless nights are made of.
In these circumstances, what happens to succession planning? Organisations are used to old ways of doing things, following legacy systems and structures by rote. But often these processes aren’t delivering the right people. To meet the talent challenge, succession management needs to be re-imagined to ensure your organisation has the skills and capabilities it needs for future success.
Preparing for the unknown
Re-imagining succession management isn’t easy. We interviewed business leaders at 29 leading global organisations and, together with the expertise and insights of our own consultants, we developed eight core ideas that we believe will provide organisations with an effective framework for successfully transforming their approach.
Perhaps one of the biggest challenges that organisations face in succession management is predicting what skills will be needed in the future to succeed in jobs that don’t yet exist. It sounds like a fool’s errand, but we believe it is possible.
Rather than focusing on what you don’t know, focus on what you do and allow this to lead succession planning. Succession management needs to be driven by specific business priorities not individual leadership roles. Making this shift means concentrating on the capabilities your leaders need in order to meet the challenges ahead.
A new conversation
Every organisation faces slightly - or even significantly - different challenges and so the capabilities needed will likewise differ. This shifts the conversation away from specific roles in the business and instead focuses on identifying the people with the competencies, experiences, personality traits and drivers that match the capability groups the business needs to cultivate. At its heart, this new conversation is about understanding what it takes to deliver on a particular strategy. Our strategy decoder identifies the critical talent capabilities that underpin a capability-based succession plan.
Take the automotive industry as an example. In the past, the best leaders have been those that can achieve operational excellence. But what happens if commercial motors are electrified? No one knows if this will happen, and if it does how long it will take, yet it has major implications for succession.
Whatever happens, it’s unlikely that pure operational excellence will be enough for future success. In the future, automotive organisations will need leaders who can think differently, form new kinds of partnerships, and drive innovation in a fast-changing, digital world. Our client is now defining these capabilities and seeing how they can develop a group of their leaders to move to this new profile to be ready when the market changes.
Starting the capability conversation
To get started, leaders must be able to answer two key questions:
- What are the inherent challenges for the organisation? The future may be unpredictable, but companies can still develop an understanding of their strengths and challenges to set their future direction. For starters, organisations should identify where they may be falling behind their competitors, addressing these areas first before working towards a disruptive state across the board.
- What type of talent will be critical to execute these strategic priorities? Planning succession around capabilities requires careful alignment of the organisation’s strategy to critical organisational capabilities.
How can you reimagine succession management to keep pace with the world of work? Learn from Korn Ferry's experts and guest from Telstra, Australia's leading Telco. Register for the webinar.