WHAT IS THE RIGHT SUCCESSION PLAN FOR A BUSINESS?
It is one of the quirks of business that so little time is spent on succession planning and hiring the right people – yet everyone agrees how important it is to build a great team with the right skills.
The cost of getting succession wrong can run into millions – just think of Alex Ferguson and Manchester United – yet it so often seems to be a knee-jerk reaction rather than a well thought out strategy. In recent times it would be difficult to believe that, for example, Tesco and Thomas Cook had clear succession planning procedures in place.
Key to a successful programme is running a strategic talent acquisition process based on forward-looking requirements rather than just relying on reactive job replacement. More often than not re-active job replacement is a bigger cost to a business than many realise.
There are a number of do’s and don’ts associated with succession planning. Top of the don’ts are a belief that succession planning purely about the CEO (since it needs to cover the whole of the Executive Board and a couple of rungs below that) and that what worked in the past will work in the future (skillsets and market conditions change). Top of the do’s are to give internal candidates a chance (bearing in mind that by definition they can’t possibly be completely ready) and to engage all the relevant stakeholders (to get greater buy-in and a wider appreciation of the skill sets required).
When push comes to shove though, should the search cover internal or external candidates? The answer is always both. This creates a better balance as not surprisingly there are benefits to both arguments. An internal candidate will know the business better but an external one will see things with a fresh perspective. So it goes on.
One thing that does need to be done is a CEO endorsed step-by-step guide to establish and maintain a systematic succession planning programme. This would include competency models, a performance management system, potential assessments, IDP’s (Individual Development Plans) and the evaluation of results. Key to this kind of systematic approach is a Talent Inventory – with Potential on the X axis and Performance on the Y axis.
One of the most important maxims is not to let anyone leaving the company choose their own successor. In many cases they just want to get on with the next phase of their career with a minimum of fuss and delay. More often than not they give a glowing reference to someone who turns out to be totally unsuitable for the job in hand.
Like many things in life though the most important aspect is what happens after the successor is on board. This should not be a sink or swim exercise and should be planned out with due care and attention.