Article No.: 09-10
Article Title: Leadership Continuity: A Framework for Success
Author: Linda Gravett, Ph.D., SPHR, CEQC
In a survey earlier this year of 315 U.S. companies, I found that only 23% of companies surveyed have a structured plan for leadership continuity, or succession planning. However, I believe that U.S. organizations will begin to pay more attention to leadership continuity over the next decade, if for no other reason than the fact that there are fewer Gen Xers in the population to take the place of retiring Boomers. Organizations will have to be competitive for quality employees, and succession planning grabs the attention of Gen Xers and Generation Y. I also found a positive correlation between training participants that view training activities as practical and useful and the existence of a publicized succession plan. From both the organization and individual standpoint, then, a plan for leadership continuity makes sense.
For purposes of this article, leadership continuity is a systematic approach towards ensuring there’s sufficient “bench strength” at any given time with the skills, knowledge and abilities to lead the organization. In my surveyed organizations, critical elements of a succession plan include:
- Identification of high potential candidates
- Structured mentor initiative
- Directed developmental assignments
- Specific success criteria and measurements
I’ve found in my work with small to medium-sized companies over the last several years that there are five drivers for success in a leadership continuity process:
Top executives must do more than give “lip service” to succession planning. These key people within the organization must be champions for leadership continuity and take part in identifying the core competencies necessary to achieve the company’s mission and vision. If they require directors and managers to participate in multi-rater feedback, they need to take the lead in receiving this feedback themselves. As top executives model core competencies, others across the organization see firsthand what it takes to guide the organization towards organizational resiliency and not be afraid that they’re going to lose their job to their potential successor. Sheri’s former boss used to tell her that she couldn’t advance (or leave) until her replacement was trained to back fill her role. Talk about motivation to fully train your subordinates!
A succession plan that works for IBM will not necessarily work for every company, so plan developers must be creative in designing a unique, tailored plan to fit their organization’s parameters. Options for career growth need to be practicable within the industry and tailored to the current size of the company; however, other options besides a linear, upwardly mobile pattern should be created. Lateral moves within many organizations can provide as much challenge and growth potential as promotions.
For example, in banking, this is very common to have a designated leader go through a management rotation in every department to learn more about each field and function and ultimately be assigned to one area, better equipped to succeed with knowledge of every aspect of the business.
The same is true with many family businesses. At Sargento, for example, the family met early on to determine who would run the business after the current President, a second generation Sargento, announced that he planned to retire in five years. There were four sons from which to choose a successor. A battery of tests, many assessments and interviews were conducted by an independent, third-party expert in the field of psychology. One of the sons was identified as the heir apparent. He then began a one to two-year rotation in every department, spending time in Sales/Marketing, Accounting/Finance, Information Systems/Human Resources, and Supply Chain. Upon completion of this rotation, he will be fully trained to continue the successful leadership of Cheese Corporation.
In my researched organizations, the method most often used to determine individuals’ succession to higher level positions is “proven skills and competencies”. I believe that defined success criteria such as this should be established at the outset, as well as success criteria for the succession plan as a whole. For example, executives should ask themselves:
- Do we want a succession plan to attract target segments of the workforce?
- Will our succession plan be developed to assist us in creating a mentorship culture?
- Do we expect our succession plan to improve retention of staff at specific levels in the organization?
- What core competencies do we require for people in positions at the first line supervisor, mid-manager, and director level?
- Are we prepared to invest not only time but the necessary dollars to get the designated leader the training required to advance?
Stakeholders in the leadership continuity process may include potential leaders, the organization’s Board, potential mentors, and existing top executives. As a succession plan is being designed and implemented, each of these stakeholders must be kept informed about their role and how they can benefit from staying involved and committed to the process.
As with any organization-wide initiative, several factors can become impediments to success. The factors that I’ve seen derail succession plans include:
- No differentiation between high performers and high potential employees
- Lower morale for employees not selected as “hi po’s”
- Failure to establish process checkpoints
- Absence of a process champion
- Impatience and the desire to pull the “hi po” from his or her training assignment
I’m characterizing high performing employees as those who are doing a better than average job in their current assignments, yet aren’t willing or interested in moving throughout the organization to take on lateral or higher level assignments. For example, a person serving as an Accounts Payable Clerk may be doing an excellent job in this role but not be interested in returning to college to obtain a Bachelor’s Degree in order to move into a managerial position and/or work extra hours often required in a higher level position. A high potential employee, on the other hand, is a person who is willing and able to take on directed assignments, enroll in additional educational opportunities, and take the extra personal time necessary to increase skills and competencies. Both types of individuals are crucial to an organization’s success.
I highly recommend that career planning and development opportunities be made available for both the high performers AND the “hi po’s” in order to sustain the morale and high motivation level of all employees. Both types of employees deserve the emotionally intelligent training that has been described throughout this book. The outcomes of the training activities will simply be different, depending on the track selected.
Even the most eloquent succession plans can veer off course without attention and nurturing. In its design phase, we suggest that process checkpoints are built into the process to ensure that at least two or three times a year outcomes are measured against objectives. If barriers have surfaced to impede success, these barriers can be addressed by the process champion, a person highly placed within the organization who can “move heaven and earth” to make important work happen. The process champion collaborates with the process owner (often Human Resources or Organizational Development) to ensure tactics are in place to sustain the process over time.
With regard to Human Resources, it’s a good idea to reflect on whether all systems are “go” prior to launching a succession plan. Are internal and external recruitment and selection processes in place? Is there a rewards and recognition system that is aligned with the objectives of the succession plan? Is an HRIS system in place to track each “hi po’s” success? If not, this needs attention prior to the launch.
Let me offer the process below as an approach that you might want to follow if you’re planning to develop a leadership continuity initiative.
Succession Planning Process
- Leadership Development is Set as a Core Objective
Top leadership commits to establishing, implementing and maintaining an ongoing leadership development process that will develop the skills, knowledge, attitude, and abilities of current and future leaders in order to ensure the organization survives and thrives.
- Determine Outcomes, Communications Method, and Metrics
Top leadership addresses the question, “what does success look like?” Metrics are established which clearly represent success in the near and long term. When and how the process should be communicated to staff at all levels is determined.
- Identify Critical Positions for Succession Planning
Top leadership decides whether to establish “bench strength” for executive positions only or integrate the process to Director and Manager levels.
- Succession Planning Set as Goals for Senior Managers
The performance review process for senior managers includes metrics identified in step #2 so that all senior managers understand expectations and are invested in succession planning, perhaps even tying such results to their bonuses, if applicable.
- Identify Core Leadership Competencies
Top leadership brainstorms 5 to 8 core competencies (such as innovation and decision making) that are necessary for targeted positions. The competencies are reduced to writing, with specificity around behaviors for each competency.
- Create Position Profiles
Competency-based profiles (job descriptions) are developed for each of the targeted positions.
- Differentiate Between Hi
Potentials and High Performers
Top leadership identifies potential candidates for succession based on their current ability, potential, and willingness to take developmental steps required to achieve the desired competency level.
- Integrated Key Talent Review Session
Top leadership meets to candidly discuss known internal and external candidates with potential to succeed in target positions.
- Develop List of Potential Directed Assignments
A list of short and long-term assignments and projects that will provide experience and skill building for specified competencies is developed.
- Communicate Commitment for Development to High Potential Candidates
If the top leadership elects to communicate to “hi po’s” their status, meet with identified individuals to share the objectives of the succession plan and ascertain their interest in pursuing a career track.
- Multi-Rater Feedback
Develop, administer and assess the results of multi-rater feedback for identified high potential candidates, as well as individuals in top level positions. Decide whether to utilize an external consultant for this process.
- Determine Individual and Organizational Leadership Gaps
Synthesize the results of the multi-rater process to determine which competencies required development, both for individuals and for the leadership team as a whole.
- Create Individual Development Plans (IDP’s)
Create IDP’s for each individual participating in the process, to include directed assignments, ongoing education, workshops, and mentoring.
- Roll Up of Multi-Rater Feedback and Executive Interviews
Share results of multi-rater feedback with individuals and discuss the IDP’s. Add additional viable suggestions for development recommended by individuals.
- Implement Individual Development Plans and Review Semi-Annually
Step back and allow individuals and their mentors to execute action plans. Provide ongoing unofficial feedback and structured semi-annual reviews.
- Create Leadership Development Curriculum
If the organization wishes to have an internal Learning Institute, work with a consultant well versed in curriculum development to ensure programs are in place as individuals have need of them in their IDP process.
- Review HR Systems for Alignment
Ensure that Human Resource Management structures are in place for performance management, compensation, and benefits.
- Quarterly Checkpoint Meeting
Top leadership meets quarterly to assess whether success criteria are being met; what barriers may exist that are hindering success; and develop action steps to remove barriers.
- Annual Talent Review Discussion
Top leadership meets to assess where high potential candidates are in terms of identified success criteria. The process is fine tuned to meet the changing environment. High performing employees are re-assessed to determine if their situation has changed.
- Measure Results
This is an ongoing process. Top leadership assesses whether specified objectives, such as reduced turnover of quality staff, are being met.
If you have any questions or need more information about this article, please complete our Contact Form, or contact Dr. Gravett by telephone at 513-753-8870.