Five Major Ways to Improve Executive Succession
Executive Summary
Surveys show many organizations possibly 40% are not prepared for senior leadership succession. Likely even higher for small to mid-sized organizations and family offices. No “ready now” candidates to step in can mean long, frustrating projects to find a successor. Organizations should do better as it is proven that effective leadership succession adds shareholder value. There are effective succession fixes and best practices that apply, but preparing for succession is often not the highest priority in organizations.
Improving Succession Effectiveness -
Given the state of succession today in so many organizations, several critical steps can be taken to realize significant improvements. The steps we highlight here are game changers that can begin to change practices and attitudes about landing that next top successor.
1. Make Roles Attractive to Top Candidates
Organizations often turn quickly to successor candidates who have the same background as the outgoing executive. The reasoning - “the background, experience and skill set of the departing executive were fine, let’s recruit someone similar”. Understandable on one dimension yet lacking certain foresight about future strategic fit.
The incumbent was likely in the role for several years at least. Every major role at turnover requires a fresh strategic and operational rethink. Roles evolve strategically sometimes without hard notice. Many organizations do not refresh and update what they require in the next executive leader, and
find later, the successor does not really have the skill set required for this dynamic world. There is even more to think about.
An executive role description does not need to be lengthy, but it does need to be current and well-thought out for several reasons. It is often the first communication a potential candidate gets from a recruiter or through a contact. Recruiters use these with candidates in the marketplace, and candidate first impressions are pivotal and impactful.
The candidate self-assessment goes like this -
Do I essentially have this role today or not?
Will this new role widen my leadership scope and let me build on my strengths and aspirations?
Can I get involved with new things not experienced?
Where could this role lead next?
If the role cannot pass these quick tests, then desirable, ideal candidates will pass. They know other opportunities will arise. They are confident.
Get the role description to where it resonates with your target audience and do not let great candidates immediately say “not interested” without engagement and discussion. Think about asking great candidates what would make the role attractive to you, could expanding it in some way make it more interesting to you. Their ideas may seal the deal.
We see this often when top functional leaders like CMOs or CFOs seek broader next roles adding line operations or P+L responsibilities. We see it also from business and product leaders wanting to be a No. 2 ultimately when a CEO is a few years away from retirement.
The role description especially at executive levels is not just a box to check. Many times, it is crucially that first communication approach to or as hearsay in the leadership marketplace. Make it persuasively interesting to candidates you want attract and get to know.
Best Practice: Landing your top candidate may only be one role tweak away. Learn to work with the best candidates in shaping a role that is highly attractive.
2. Coach Ideal Candidates for Success
Occasionally, good internal candidates perform poorly in succession interviews and assessments even when labeled a “ready now” successor. For some reason, expectations are not met creating surprise and disappointment. Discouraged, these candidates may even decide to leave the organization.
These outcomes are frequently driven by several scenarios, all of them detrimental to succession, morale and culture. First, the candidate was likely not a “ready now candidate” even though they were often told they were as their name appeared in succession plans.
Another scenario is when decisionmakers begin to feel an outside successor is now likely needed. External candidates are scoring better in interviews especially against the leadership and competency criteria. The external candidates appear better prepared and a better fit.
Our experience indicates that these scenarios are often due to poor candidate preparation. The candidate maybe just did not prepare for the interviews and assessments. There was even possibly overconfidence. The candidate took the discussions too lightly. Answers to key interview questions were not succinct, they ran long or were uninformed. Answers to questions like, what would you do differently in this role, were not well thought out.
Keep in mind good outside recruiters coach their candidates well. They prep on critical issues, on competency success factors and on key selection criteria. They also fully prepare the client with comprehensive candidate reports. The same should happen to internal candidates whether there are external candidates or not.
Best Practice: Assure candidate preparedness and knowledge consistency amongst both internal and external candidates. Prepare internal candidates as if they are outsiders.
3. Create a Potential Candidate Knowledge Bank
When searching for those “ideal fit” external succession candidates, the window of opportunity to find them is small, usually two to three months. The remaining succession time is for interviewing, assessment, decision making, negotiation and onboarding. Total end-to-end succession time averages four to six months. Unacceptable, and more needs to be done.
First, “ideal fit” candidates may not get contacted or may not be interested during that two-to-three-month window. In that window, outside recruiters deliver good candidates from their databank as they are well known to that search firm.
Thinking rationally, the hunt for top successor candidates should not just rely on that one off, short window in time. Or from one firms best known candidates. Executive succession is far too important and so is succession for other mission critical professionals. An organization’s succession planning team should consider building its own potential candidate databank developed all throughout the year. It makes so much sense as it informs all of succession all throughout the year.
Every organization has good candidate information sources and channels. There are many individuals in the organization linked to: direct industry and sector contacts, former colleagues, individuals attending industry events, speakers and panelists, industry newsletters and industry analyst reports, etc. Organized well, this intelligence leverages succession planning with informed strategic possibilities. It also helps jumpstart recruiters and benchmark internal candidates.
Best Practice: Build the organization’s knowledge bank of prospective candidates, market information and rankings. Expand your potential candidate universe throughout the year and solely relying on an outside firm.
4. Benefit From Lean Succession
Executive succession projects can be frustratingly long. Four-to-six-month projects are the average when there is no ready successor. Weeks can elapse attracting candidates, completing interviews, and closing with the finalist candidate. When succession expectations are not met, CEOs, Board Directors and even investors can raise concerns about succession planning and succession effectiveness.
Our experience indicates lengthy succession projects occur for variety of reasons. Proof is in looking back – the slow start, the time to organize resources, launching the search firm, the weeks to complete candidate interviews. Long CEO searches are prime examples also and proving how risks build up affecting enterprise performance and even viability.
We believe lean succession techniques similar to lean manufacturing techniques are relevant. Removing unproductive time and other inefficiencies means the successor onboards more quickly and gets right to strategic execution.
Where can an organization start with lean succession? First, every organization needs a succession project blueprint on the shelf defining project leadership, steps by whom and when, interview and assessment protocols, preferred on-call search firms and clear timing expectations. Lack of a tight project plan can add weeks to succession.
Next, get a cracking fast start, the major time sink from delays in -- critical launch communications; indecision in informing, preparing and scheduling candidates; weeks to find and select the right search firm, getting time on executive calendars. These delays can add a month.
It is easy to feel no crisis urgency at the beginning of an executive succession project. As each month passes though without a successor, urgency builds and stakeholders notice. Go lean and develop a sense of urgency.
Best Practice: Drive lean succession, eliminate dead spots. Lead with a tight, proven project plan. Assign a dedicated project leader having the authority, sense of urgency, commitment and backing.
5. Effective Succession Requires Champions
Research proves there is real value from effective leadership succession and real costs to poor succession. Many Boards and insiders feel their organization is not prepared for succession, i.e., no ready successor or no effective plan to find one or both. Organizations that manage succession well outperform; others pay the price with loss in value.
Research also indicates why organizations are not prepared – succession planning has been a low priority, jammed governance agendas, stale succession plans, overwhelmed HR managers, lack of leadership commitment and not being able to translate future leadership requirements into a plan. With so much on the line, why do gaps remain and what can be done to close them.
We have concluded organizations need a Succession Champion. An individual who knows succession best practices, who is a great project leader, who has authority to assign resources and accountabilities, is committed and is accepted. Someone recognized as an individual who can deliver results and value. An individual with backing from the CEO, the CHRO and at times the Board. Someone who gets succession and can make things happen.
Best Practice: Empower Succession Champions with authority, resources and commitment then reap enterprise value, performance and sustainability. Everyone will notice.
