Benefits of Best Practice Succession Planning
Best practice succession planning gives the Board, management team, employees, and shareholders confidence in the long-term future of the company by reducing succession risk.
Owns the process. Confidence in a successful CEO appointment and transition. Demystification of the succession process and allaying of apprehension. Development of a robust leadership pipeline, the number one sign of good governance. Best practice is for the Board to look inside and outside the organisation using a proven process and methodology for evaluating leadership talent.
Input into the process. The CEO’s number one priority is to have developed at least one potential successor inside the organisation. The CEO provides input into the current and future state of the business model and strategies. They also provide input to the team conducting the internal assessments in terms of their objective and dispassionate view of the internal candidates.
Senior Management Team
A clear understanding of the internal process and the required CEO skills and competencies. A high-level developmental roadmap and detailed personal coaching plan (internal candidates) which can be refreshed every 6 months depending on the transition time frame.
Assurance that the Board is rigorously managing the succession process and performing active oversight of leadership development
Shareholders gain confidence that the best leadership is being identified, recruited, developed, and retained based upon the ability to drive business performance and enhance long-term shareholder value.
Succession planning as a process versus a one time event
Planning as a one-time event
- A last minute, one time event at the end of the incumbent’s tenure.
- A single person event, few options.
- A static assessment only of current capability and readiness fit.
- Commence an executive search at the end of the incumbent’s tenure.
- A compliance approach with names in boxes on today’s org chart.
- A process run confidentially by the Chair and NC.
Planning over a period of time
- Start early and make it a continuous practice.
- A team for future success & succession options for the CEO and Board.
- A dynamic future-focused assessment including culture fit and capacity to adapt and grow.
- Engage the market early to identify potential external candidates and continuously develop internals.
- A flexible, nimble and deeper pool of potential successors who can adapt the strategy within a flexible structure.
- A process involving close collaboration and alignment between the CEO, CHRO and Board.
The 5 A’s Of Succession
Succession is a Process, not a Product.
Create early alignment amongst key stakeholders on the future strategic priorities and desired impact of the CEO and the ideal profile of the leader to deliver this future impact
Assess & Develop
Conduct assessments of potential internal successors early in the process to identify critical gaps – providing sufficient time to test them and accelerate their development and readiness.
Access & Attract
Ensure early identification and tracking of potential external successors – who could come directly into the CEO role or be brought in earlier to feeder roles to strengthen succession options.
At the time of selection do an insightful ‘apple to apple’ comparison of the fit of all candidates – identifying both signature strengths and potential derailers, gaps and risks.
Accelerate Transition & Impact
Support the selected candidate to accelerate his / her transition into and impact in the CEO role.
A systems approach to leadership assessment, development and succession