Why Are So Many Organizations Bad At Succession Planning?
Bryan Benjamin, Principal & Market Team Lead; Mehrdad Derayeh, Managing Consultant
When it comes to succession planning, there are two things almost everybody agrees on.
First, effective succession planning is the cornerstone of sustainable organizations.
And second, the overwhelming majority of organizations are bad at succession planning.
Why would so many organizations fail at something that is considered so important? The reasons vary from organization to organization, but there are some common causes and in many cases, excuses.
One of the most common reasons is that succession planning often means different things to different people within the same organization. And although ‘succession planning’ has become a top-of-mind issue for many business leaders, there is often more talk than. In the absence of a commitment to succession planning, many organizations fail to even take the first steps to tackle the problem. Instead, they waste time wrestling with more tactical and short-term challenges.
These organizations become reactive, scrambling to fill gaps after they have occurred with no real sense of future talent needs. They believe that succession is a distraction from immediate needs, not realizing that they need to plan today for tomorrow’s requirements. They think of succession planning as a “project” rather than an ongoing strategic priority, something that is discussed superficially once a year rather than a regular top-of-mind issue. Unfortunately, succession plans launched after the fact can devolve into popularity contests or ‘quick fixes', rather than a thoughtful, measured analysis of eligible candidates.
Organizations without clearly defined, ongoing succession planning are unlikely to have a clear grasp of talent across all areas and departments. Each area may have some idea of who makes a promising succession candidate, but no one will know if there is someone in another area of the organization that can cross boundaries to fill a key position.
The absence of transparency in succession planning is a common shortcoming. Many organizations do talent assessments and succession forecasting, but fail to communicate those expectations or plans to the candidates. Those are the organizations that are the most surprised when a promising candidate turns down a promotion, in large part because they were not aware they were being considered and had no time to consider the changes in personal and professional conditions.
Even among those entities that perform ongoing succession planning, there are shortcomings. For example, too many organizations devote their succession planning energies only to external talent searches or only to internal talent development, rather than balancing these two important parallel streams. Paying attention to both helps ensure that instead of just settling for the best available candidate, you will have options emerging from a pool of internal talent that have been deliberately developed and a window into appropriate talent available externally. In the end, succession is about mitigating risk to the organization and this starts with having more options, both internally and externally.
How can you improve your organization’s approach to succession planning? The most successful organizations have demonstrated a clear pattern of effective succession planning that is instructive to organizations of all shapes and sizes.
• Start at the top. Succession planning must be treated as an executive priority. For that to happen, the highest levels need to dedicate executive meeting time to discuss talent needs. Developing talent must be acknowledged as a core responsibility of all executives.
• Link to future business needs. Succession planning must be closely aligned with an organization’s overall strategic priorities. This requires a clear understanding of evolving business needs, and full integration with human resource and talent management practices. That way, you’re not just looking at who could do the job now, but also at who will fill the future needs of the organization.
• Don’t rely on your gut. It’s okay to tell people about the gut feeling you have about a potential succession candidate. But it’s a good idea to back that up with hard data on how that candidate measures up against thoughtfully designed criteria that measures the behaviors and characteristics needed for success. In a succession context, it is particularly important that this data be collected in a consistent, objective, and accurate way. Many organizations identify and evaluate succession candidates in an ad hoc fashion, relying mostly on personal recommendations and impressions. There is great value in creating a consistent baseline to measure potential succession candidates.
• The best succession candidates are built, not discovered. Ongoing effort to develop top talent for key succession roles will pay off handsomely because it increases the chances that you will get exactly the right person in the right job. Succession planning is, in many ways, an important extension of an overall talent management program. Ignoring the need for ongoing talent development will leave a lot of square pegs sitting in round holes. Even people showing exceptional strong ‘promise’ may be set-up for failure.
• Embrace transparency. Poorly executed succession planning can be a divisive force, triggering turf wars and destructive internal horse races. In order to get real traction with succession efforts, there must be clear, relevant, and timely communication. This includes being prepared to have tough discussions and answer challenging questions. The more you can share, the more respect you will garner for your succession efforts.
A lot of organizations steer clear of formal succession planning because they fear it is an expensive process that could prove to be a drain on current resources. In fact, the only real cost for an effective succession plan is time. Although this is a process that can benefit greatly from a partnership with an effective third party, most effective succession plans require only the commitment of the organization to thoughtful, deliberate planning. And that makes for a robust return on investment in a formal succession plan.
Succession planning is hard, ongoing work. However, it is hard work that can pay off handsomely for any organization committed enough to make it an ongoing priority.