How to Revolutionize Your Succession Plan
“Do you want me to tell you what we tell the Board or what we actually do?” the senior executive told us during our conversation about her company’s succession planning process. Unfortunately, as disheartening as this statement is, we found it refreshing. This executive called it how most companies approach succession planning – an annual process that ends up being much ado about nothing. After all the time spent doing a careful talent review, identifying individuals to place on the official succession tracker, in the end, leadership simply goes with their gut.
This is probably why only 14% of leaders surveyed by Deloitte, say their companies do succession planning well. We’ve been helping companies do proper succession planning for a long time, and we see the emergence of two forces that indicate a powerful need to overhaul this gut approach.
First Force – If 2020 taught us anything, it’s that stuff happens we can’t plan for, and that building resiliency is critically important for both organizations and people. It seems counterintuitive, but having a robust plan can make you more resilient in uncertain times. Resiliency comes from preparing a strong and diverse pipeline. It comes from future-proofing the organization by eliminating the reactionary, emotional hiring decisions that are all too common. Instead, it builds the leadership bench needed to execute on the future needs of the business. Succession planning helps ensure business continuity by mitigating the risk of leaving key leadership roles unfilled or under-filled and providing the business continuity plan that the Board and shareholders require.
Second Force – 2020 has also shown us there is a stark need for social change. When 85% of corporate executives are white and 93% of Fortune 100 executives are male, going with your gut will probably not get you much diversity. One recent study showed that 77% of the American public says it’s deeply important that companies play a role in creating racial equality to keep or earn their trust. Other research shows diverse teams are more effective and creative, making a direct impact on the bottom line. Having a strong, equitable, and diverse leadership bench is not only crucial for business resiliency, but it’s also important to customers and employees and is the right thing for a strong and stable society.