At some point, leadership transition is a reality for all companies. One HR executive I recently spoke to is concerned that her 300-person company has built such amazing employee loyalty that approximately 35% of their workforce will retire in the next five years! Another organization is concerned that their founder-based brand will not survive the CEO’s retirement. And the CEO of yet another larger company has unintentionally sparked a c-suite jousting match leaving his executive team more focused on positioning themselves for his crown than on working together to run the company.
Whether a leadership transition is imminent or a decade off, succession planning is not about identifying an eventual replacement for your CEO — it’s not about who winds up in the corner office.
It is about strengthening the leadership throughout your entire organization so you have a team prepared to collectively guide the company through any transition, planned or unexpected. It’s about planning and preparing during good weather, while calm prevails and decision-making is led with clarity. It’s about having a roadmap when the inevitable storm arises. It’s about mitigating anxiety and reducing risk.
The key is building your bench of capable leaders to ensure as smooth a transition as possible when the anticipated retirement or unexpected exit takes place.
You’ve got no time to waste: Let’s face it — the best talent takes time, resources and skill to find, recruit, and develop into your key leaders. Start developing the future leaders of your organization now.
To get started:
- Clarify Leadership Roles: identify and capture the responsibilities, skills and attributes of all the essential roles in your organization. Start with the CEO, move to the senior leaders and then do the same for any role that, if vacated unexpectedly tomorrow, would cause great strain on your organization. According to a recent article by McKinsey, 30% of the highest value roles in an organization are three levels below the CEO.
- Assess Gaps: this is a great time to figure out where you have skill or competency gaps in your organization’s leadership. What is lacking that could be filled with the next hire or developed through the engagement of an emerging leader already in your ranks?
- Identify Emerging Leaders: determine who, regardless of current title, has the potential to help move the company forward and play a leadership role sometime in the future. Grow their skills, mentor them, expand their networks, and champion their progress.
- Establish Appropriate Redundancy: typically, redundancy is viewed as a negative. However, a degree of overlap in knowledge and skills is essential for idea sharing, organizational agility and to ensure critical functions are executed throughout an unplanned transition. Think, “what would happen if our CFO got hit by the proverbial bus?”
- Map Out a Plan: work with your executive team and board to determine the process for managing transitions for key roles in different scenarios. How will the organization keep moving forward? What will the search/hiring/promotion process look like? How will the transition be communicated and to whom
- Envision Your Legacy: what do you hope to have accomplished and leave behind when it is time for you to make a transition? This article from McKinsey lays out some critical questions to help CEOs assess their priorities for their last 100 days.
Now is the time to position your organization for successful succession. Don’t worry about who will sit in which chair. Focus on strengthening all of the seats around the table so yours can remain empty until the right successor is identified, oriented and fully integrated into the role.