Succession Planning: Preparing Tomorrow’s Leaders
In part one of this two part article by Darcy Jacobsen, content analyst and blogger for Globoforce, she examines the need for succession planning. In part two, she offers six tips on how to develop a sound plan.
According to a study by Quantum Workplace, 1 percent of executives believe that their succession plans are excellent. Okay. You might be in the lucky minority. You might be that rare company that has a fantastic multi-level succession plan based on substantive, nuanced data, which not only makes your high-potential employees feel invested, but also yields great leadership for your organization.
But it’s statistically unlikely.
You’re probably more like the rest of the world. You would love to have that kind of succession plan. It comes up in meetings all the time, but when it comes to actually creating it, there’s a sort of paralysis that sets in. Shoulders are shrugged. Helpless looks exchanged. There’s no clear path. No sense where to start. And it all gets pushed off to the next meeting. Or quarter. Or decade.
“The majority (of executives) do not think that their organizations are doing enough to prepare for eventual changes in leadership at the CEO and C-suite levels,” says Stanford professor David Larcker in the 2014 Report on Senior Executive Succession Planning and Talent Development. “Nor are they confident that they have the right practices in place to be sure of identifying the best leaders for tomorrow. These findings are surprising, really, given the importance that strong leadership has on the long-term performance of organizations. Research shows that companies with sound succession plans tend to do better.”
I got an email from a reader the other day who provided a great view from the trenches on this topic. He is a candidate for a director of HR position at an IT company, and after an interview where the CEO and COO grilled him about his ideas for succession planning, he wrote: “Succession planning from my experience (or lack of) is like the HR equivalent of searching for the Holy Grail! I have yet to work for a public or private company that has been able to even dip their toes into this sacred pool.”
Some 98 percent of companies believe a CEO succession plan to be important–but only 35 percent actually have one in place. Likewise, DDI’s 2011 Global Leadership Forecast found that only 1 in 3 organizations have high-quality, effective development plans for leadership in general, and in a 2011 AMA Enterprise survey only half of survey respondents said their organizations were somewhat effective in their ability to retain high-potential employees.
Would we all like to have a great succession plan? Yes. Do we all know where to start? Apparently not. In part two we examine six tips on how to develop a sound succession plan.