The Key to Your Leadership Mobility Is a Contextual Approach
A spray and pray approach to your C-Suite succession planning does not work—a contextual approach does.
C-Suite succession planning is the process of identifying new leaders and developing them to take over the leadership role. It serves as a safety net to ensure all the operations remain smooth while the C-Suite position is undergoing some transition.
In the new age of technology-savvy marathons, many large corporates are losing focus on the key issue of the leadership pipeline and succession practices. Some of the leading companies have experienced a massive turnover at the top, costing close to $1 trillion a year. The biggest costs in such cases are underperformance—companies that hire ill-suited external CEOs, loss of intellectual capital in the C-suites of organizations that executives leave behind, and internally-promoted, but unprepared successors.
Rethink your leadership mobility
Organization can (and must) do better, and the solution is not that complicated. After one of the largest and most comprehensive studies ever conducted on the predictors of leader success, SHL found that organizations need to rethink leadership mobility and development. Today’s environment is a challenging one, but the evidence is clear that using context to enhance current approaches to leadership mobility decisions will leave organizations better placed to develop and deploy targeted, dynamic, agile, and precise leadership strategies. In addition to this, what we have found is that work in succession planning needs to start well before the need arises. In the quote by Klaus Schwab (Founder and Chairman of the World Economic Forum), he said:
“In the new world, it’s not the big fish which eats the small fish, it’s the fast fish which eats the slow fish”
Regardless of their size, organizations that are able to adapt quickly to market changes will stand out from their competitors. For an organization to survive and thrive in the VUCA world, they need to be agile, proactive, and responsive to change.
The evidence is clear that using context to enhance current approaches to leadership mobility decisions will leave organizations better placed to develop and deploy targeted, dynamic, agile, and precise leadership strategies.
CEOs will inevitably leave their office someday, and for many reasons (better opportunity, starting a new venture, focusing on personal life goals, retirement, etc.), yet research has long shown that most organizations are unprepared to replace them.
5 Things you need to consider in your C-suite succession planning
Succession planning prepares the organization for the worst-case scenario and no-notice situation. To stay on top of the game and ensure there is no “leadership void”, a board needs to consider the following principles of a gold standard succession process for its C-suite:
- Align the board on future C-suite profiles. Start well in advance by engaging in discussions with the board to understand their expectations and ensure alignment with the business priorities. Link these strategic priorities to the business challenges, experiences, and personality traits required in the role. Basis this, create success role profiles for each of the C-suites and use them as a blueprint to evaluate talent, internally and externally.
- Consider context and industry benchmarks and establish a best practice process. Get an unfiltered, multi-dimensional view of candidates’ proficient areas and development areas and know what will work in your context. Evaluate the context-specific relevant competencies, experiences, and beneath-the-surface personality traits. Develop a robust plan and timeline that has the support of the board. Our research has shown that considering context can improve your chances of success by 4X.
- Create Plan B, C, D, do not just plan for an immediate replacement. Succession is an ongoing process to develop the talent pipeline. Prepare for near-term and mid-term leaders by identifying high potential talent internally for future leadership.
- Groom HiPo talent and cross-train them for future-ready leadership roles. Adopt a mix of on-the-job training, coaching, mentoring, and skill-building training to prepare your HiPo talent for the future. Ensure a future-ready talent pipeline within the organization for generations of successors by identifying areas to accelerate growth and close critical gaps. Help your talent realize their potential with a customized development plan to meet their individual needs and the organization’s expectations in a future leader.
- Make succession planning a standing board agenda item. C-suite succession planning is an ongoing process that continues even after a new C-suite profile leader is appointed. Keep the board apprised of the development plans and assure them how the organization’s future leadership needs. Link strategy sessions with talent development sessions to ensure that any shifts in the strategy will inform what will be required of future leaders.
Succession candidates do not spring up fully formed overnight. Capable successors are the product of years of planning, mentoring, and guidance. This investment will enable the organization to continually strengthen the leadership needed to deliver strategic priorities for high performance.