Seonaid Charlesworth

Several corporate directors I have spoken with in the past six months have described a growing concern—the current state of succession management.  The succession plans they describe having reviewed are, at best, replacement plans for senior leadership positions.  In most cases, these successors are not within two years of being ready for their target role—this estimate of readiness being rough and difficult to defend.  The challenge, however, does not lie solely with the senior leadership team.  Some Boards are so preoccupied with CEO succession that they don’t look deeper into the organization to gauge the pipeline of available talent for key roles.  For an organization to deliver on its business strategy, the senior leadership team needs to identify and prepare people one and two levels below them, paying particular attention to critical roles.

In brief, succession management is composed of the following basic process:

Based on applied research and experience working with senior leaders at Fortune 100 companies, large utilities and government agencies, here are the three factors that often cause succession plans to fail:

1.    Lack of Focus on Critical Roles

Companies with succession plans that lack impact are often focused too broadly across the organization instead of focusing on key areas that are critical for strategic success.  Others may focus too narrowly on specific positions that may not exist in several years, rendering the succession plan obsolete.  For succession plans to have an impact, they need to focus on areas of the organization that are critical to executing on business strategy and where the quality and/or availability of talent for these roles is scarce.  These two conditions of strategic relevance and scarcity are at the forefront in designing a succession management program that has teeth.  Rather than focusing indiscriminately (e.g., all Director-level roles) or too narrowly on specific positions that may not exist in a few years, strategic talent requirements often include groups of people or roles.

What can help:

·         Ensuring the senior human resources leader is actively involved in business strategy discussions, identifying implications for talent

·         Focusing the agenda of the senior leadership team on the roles and types of performance that will be required to execute on the business strategy

·         Discipline in making succession a priority for roles that are strategically important and where high quality talent is scarce

2.    Poor Choices of Succession Candidates

Some organizations have identified candidates for key roles but their succession plans get derailed because the quality of people in the succession pool is either poor or is perceived to be poor by senior leadership or the Board.  Companies routinely water down the quality of their succession pools by choosing candidates based on past performance, rather than on valid predictions of future performance in a new role.  Decades of research in industrial psychology has shown that past performance only predicts future performance when the context and requirements are the same.  As many senior leaders have noted, it is all too common to find a high performer derail soon after promotion.  Another key factor that is watering down succession pools is relying on managers’ nominations of their direct reports using an unstructured process.  The “just like me” phenomenon is human nature—people choose successors based on similarity and familiarity, which are most often unrelated to future requirements of the role.  The result is a severely compromised pool of successors.

What can help:

·         Develop clear criteria for nominating succession candidates and communicate them throughout the organization

·         Assess candidates comprehensively against future requirements (e.g., results achieved, career aspirations, experience, abilities and personal characteristics)

·         Define a process for choosing successors that is accurate and organizationally supported

3.    Reluctance of Senior Leaders to Develop Junior Ones

Companies that have this problem notice that talented up-and-coming leaders leave for better opportunities elsewhere.  This is particularly true in family-owned businesses, professional services firms and companies where the product is highly technical to produce. Systemic underdevelopment of emerging leaders constrains the leadership pipeline.  When it comes to leadership development, it all rolls up to the top.  Senior leaders who are not strong developers of people create the conditions for underdevelopment throughout the organization.

What can help:

·         Teach the skills of coaching and developing others to senior leaders

·         Create a professional track for people who have the capacity to take on bigger roles, but prefer not to develop and manage others

·         Hold leaders accountable for preparing emerging leaders for bigger roles

Dr. Seonaid Charlesworth has spent much of her career with a leading, global organizational psychology consulting firm in the U.S. She has worked with major international companies, including Shell, Allstate, Genentech, Wal-Mart, Lowe’s and Barclays Global Investors, in areas such as talent management systems, succession management, and leadership assessment. With a PhD in Industrial/Organizational Psychology and extensive experience working with Global 1000 companies, she combines deep professional understanding with practical know-how in real-world application. She currently leads the leadership assessment practice for Western Canada within Leadership Solutions at Knightsbridge Human Capital Solutions.