What to do if your c-level exec resigned today?
Ideally, a successor would be ready to step in, with as little disruption as possible. The reality is more of a challenge however, as potential internal replacements may lack key competencies required to perform the role or an external hire could be on a notice period of several months.
Internal vs. external
Traditionally, succession planning has involved identifying and developing internal talent for future leadership and specialist roles. High potential individuals are grouped by specific competencies and earmarked as potential medium and long-term successors to these key roles. While maintaining an awareness of internal talent, many organisations seeing the benefit of succession planning are also following potential new business leaders externally.
Both approaches have their merits; it may be trickier to assess the leadership capabilities of an external hire but he / she will bring a new outlook and skills to the organisation. If the potential internal promotion is unexpected, there may be a skills gap which could be addressed by an external hire.
To ensure full market coverage, it’s advisable to look both internally and externally when devising succession plans. But these plans can only be successful if they’re updated regularly and executed properly. Given the challenging economic times, HR and line management functions may deem resources and budget better spent elsewhere than the ‘what if’ scenario that is succession planning. But to avoid being left vulnerable with the sudden departure of a key executive, it’s important to adopt a proactive approach to talent management by developing internal successors and to regularly track the external market for up-to-date insight on potential external options.
As part of a retained process, an executive search firm with strong networks in your required area or sector is able to benchmark internal talent, in conjunction with comprehensive market mapping and confidential approaches to selected individuals.
Succession planning may be implemented at a regional, business unit or organisational level and a similar approach may be undertaken regardless of size and complexity. But even the most well-devised succession plan for your c-level executive’s departure will be ineffective if it’s five years old – potential successors change career direction or leave organisations, while individuals who are relevant now, may not be in near future.
The most critical factor in effective succession planning is to define a strategy, and continually adjust it according to market events and internal talent development plans.
A succession planning approach may include:
- Conducting a full audit of key leadership and niche, skilled roles
- Defining future strategy and growth plans
- Examining the competencies required in the key leadership roles to achieve organisational goals in the short, medium and long term
- Identifying potential future leaders internally, using a range of methodologies from appraisal feedback and consultation with HR, to psychometric testing and assessment centres
- Developing and mentoring high potential internal employees with new roles, challenging assignments, coaching and formal programmes
- Maintaining up-to-date knowledge of potential external hires through regular talent mapping
- Regularly clarifying key competency criteria according to business strategy and skills gaps, consequently readjusting potential pools of relevant internal and external candidates.
Tracking and measuring the results of succession planning outcomes are also key, for both internal promotions and external hires.
Replacing a key figure in your organisation will never be completely seamless – but with an effective succession plan in place you have a higher chance of getting it right.