What are some items you keep around your house that you know you’ll probably never use? I confess, I’ve foolishly made a few purchases that will likely never see any action soon.
· Sport coat – I live in Austin. Shorts and flip flops are considered business casual here. I only keep the jacket around for Dallas trips. Those people are serious up there!
· Kitchen sous vide machine – Who thought it would be a good idea to boil filet mignon?
· Stationary exercise bike – Insert a joke here about expensive items to hang your dirty clothes on.
· Extended warranty for stationary exercise bike – No comment.
A typical corporate succession plan lives, for many companies, in some dusty filing cabinet somewhere, but often has no practical meaning in day-to-day operations. Estimates for the number of companies with a succession plan in place range on the low end of about 50% to the high end of 90% for senior executives. Those numbers aren’t bad, until you consider a few more stats:
· Less than one-third used a “formal approach”
· Only 14% of execs believe their companies “do succession well”
· 74% of new execs claimed they felt prepared for their senior leader role
· 50% of leaders reported that it took them six months to become effective in their new roles
Replacement Planning ≠ Succession Planning
See if you recognize this story. Key c-suite executive gets poached by a rival firm or abruptly decides to pursue her lifelong dream of becoming a scuba instructor in The Bahamas. You get a notice of two weeks. All kinds of institutional knowledge and crucial industry relationships walk out the door with her. A fire drill ensues. The board says, “Let’s not let this happen again,” and insists you create a succession plan for all of your lynchpin positions.
Many companies move into “box checking” mode when it comes to succession. They hold an off-site. On a big whiteboard, they identify 1-2 potential replacements for each executive role, which is often done through a nominating process, hopefully with some performance and psychometric assessment data attached. Voilà, you have a succession plan.
Unfortunately, this is only a replacement plan. All you’ve done is identify who is next up, and perhaps what you would need to do to get them ready.
A true succession plan, better termed a “management continuity plan,” is a comprehensive approach to identifying the knowledge, skills, abilities and relationships of critical roles; quantitatively and qualitatively assessing the talent pool below those roles and implementing a customized developmental path for each potential successor. Once these three elements are in place, any executive could leave, and there would be some degree of continuity on Day 1 when the new leader fills their shoes.
Three Essential Artifacts for Management Continuity Plan
Now that we are square on definitions, would you say your org has a replacement, management continuity or some in-between Frankenstein monster of a plan? To move closer to confidence on continuity, let me recommend that you produce three documents for each of your high potential successors.
1. Senior Executive Position Profile
For every mission-critical role in your business, you need to develop a job-description-on-steroids. This is an exhaustive document, typically 5-10 pages, that articulates the competencies, technical expertise, personality traits, institutional knowledge, stakeholder relationships and industry network of the incumbent executive (assuming they are performing at a high level in their role). Moreover, the profile should enumerate most current job functions, regular daily/weekly/monthly/annual leadership responsibilities and other relevant activities.
How do you derive this data? Start with a self-assessment by the current executive in which they itemize all of these descriptors of their functional expectation and realities. Follow up with a brief behavioral interview to help you read between the lines about HOW they achieve results, not just WHAT they do. And because most executives are not fully self-aware of their personal genius, some kind of 360 degree instrument might be beneficial to get input from those who observe them every day. I also like to give senior execs an objective psychometric assessment, such as the Hogan Test, to provide a validated benchmark of their personality attributes and work preferences.
Want to see a sample Position Profile or get access to a template you can use? InMail me. I’m happy to share!
2. Successor Candidate Scorecard
Now it’s time to assess your candidate pool for each incumbent position in your firm. Evaluating at least 2-3 potential successors will provide a helpful comparison of your up-and-comers for each position. Build a scorecard for each candidate to help you do gap analysis on their current readiness to assume that role. Begin by synthesizing your findings from the position profile exercise into the top ten most important of each of the measured categories: competencies, technical expertise knowledge, personality traits and job functions. Create readiness ratings for each criterion on range such as: Currently Ready, Could Be Ready in 6 Months, Could Ready in One Year, Could Be Ready in 3 Years, Will Likely Never Be Ready. Have the candidate self-rate their current readiness in each area. Utilize an online 360 degree rating assessment to get readiness feedback from those who work around them. Give special weighting to the current holder of that position’s appraisal of the candidate. Collate the data into a gap analysis scorecard that highlights where the candidate is currently able to assume the role, and where they require training or more experience.
3. Personalized Professional Development Plan
It’s not enough to identify and select a successor. You don’t have a real succession plan unless you are developing your talent pool. Utilizing the candidate scorecard, look for experiential learning opportunities to fill in the knowledge, skill, ability and relational gaps for each potential successor. Developmental experiences can include stretch projects, ride-along observations, certification courses, direct knowledge transfer, important readings, taking on more visible leadership positions, network introductions and any other activity that improves their readiness to assume higher responsibility. This plan should be staged over a period of 6-24 months, documented and monitored.
Start Small Today
Are you overwhelmed by the prospect of creating position profiles for a dozen executives and development plans 30+ high potentials who might succeed them? Such an undertaking could be highly disruptive to an organization, if attempted all at once. Start with one or two positions. Which of your managers or knowledge leaders, if they won the lottery and abruptly quit your company, would you most urgently miss? As time goes by start chipping away other key roles in the org. If you are not comfortable taking a DIY approach, please reach out to Emergent Execs to build your position profiles, candidate scorecards and individual development plans.