Articles
SUCCESSION PLANNING:
IT’S THE ELEPHANT IN THE ROOM
THAT CAN MAKE OR BREAK YOUR BUSINESS
By Dawn Robertson
Strategic succession planning is one of the most critical – and most often ignored – issues in growing a business today. “It’s like the elephant in the room. Everyone knows it’s there but nobody wants to talk about it,” says Dawn Robertson, co-founder and principle of Strategic Change Resources in Rowayton, Conn. “Some 57 percent of major companies have a succession planning process, but most say they don’t use it. This means the majority of businesses in the U.S. don’t have a succession plan.”
Ms. Robertson has worked with many Fortune companies on this issue and recently shared her approach with 16 CEO’s at a meeting of the Fairfield, CT Chapter of The Executive Committee (TEC). These statistics point to the first and most important lesson, she says. “Succession planning is more than just a paper exercise. Done right, it’s a deliberately disciplined approach to developing internal talent and acquiring external talent from the standpoint of both emergency replacement and development,” she explains.
“When you don’t have anybody to walk into a key position, the organization loses its focus when a key individual leaves. When this happens, the organization can’t hit its goals and objectives because people are sidelined with trying to work this out in a panic. In a publicly-held company, you need to be able to replace people immediately as a way of signaling that the business can continue,” says Mrs. Robertson. Even in privately-held companies, ignoring this issue can spell doom. “Two of my clients had to sell their companies because they didn’t have a succession plan and couldn’t figure it out,” she says.
Ms. Robertson has compiled four essential rules for strategic succession planning, focused on developing a pool of talent, because, as she explains, “The whole notion of there being only one person who can do a job doesn’t work. People change. Things happen in their lives, and if you’ve groomed just one individual for each of the top spots or key roles, you’ve put one fragile egg into a very important basket.”
Her four rules for strategic succession planning are:
Rule #1: Look at talent through the lenses of performance and results, not just potential.
In other words, identify the outcomes expected of each role, regardless of who’s in the role. This means identifying clear, detailed standards for each. Communicate these standards throughout the organization and measure all candidates, internal or external, against the standards. By doing this, you’ll avoid “falling in love” with a candidate who shows up well but who isn’t interested in growing along with the company.
“This approach will also help you spot the people you have who don’t deliver the results and have limited potential,” says Ms. Robertson. “Then it’s your job to move them out. A lot of managers let poor performers stay and hope for the best. But nobody ever erupts into spontaneous competency.”
Rule #2: Determine the key jobs that make your company tick.
To do this, look at people who have key relationships with customers or suppliers, specific knowledge in competitive areas, historical information, responsibility for major initiatives, management functions in mission critical areas, and thought leadership or influence roles.
“Succession planning is not just for CEOs or for those in the C-Suite. It’s also for developing the next generation of leaders throughout the company. And it’s for identifying and protecting key roles in the organization. Losing someone in a key role can be worse than losing the CEO. There are some people in every organization who hold the company hostage. A client recently asked me to streamline the way they take orders from brokers. They were poised to triple sales and couldn’t have handled the volume of work that would bring. We put a group together and identified about 250 steps involved. One member, it turns out, was the only person in the entire company who knew all 250 steps. She quit the day we finished. If she left before we started, it would have taken us months, maybe years, to figure it out. People like that can put you at risk if you have not identified them and cross-trained to replace them,” she says.
Rule #3: Figure out the skills, knowledge and talent you need today and tomorrow.
A skill refers to knowing a specific method or technique, like how to run software or how to negotiate a contract, explains Ms. Robertson. Skills are relatively easy to teach. Knowledge refers both to having the facts – about products, customers, policies, etc. – plus the lessons learned through experience. Knowledge is also learnable by most employees. Talent, on the other hand, is almost impossible to teach because it comes from a person’s recurring patterns of thought, feeling or behavior productively applied to their work. “It’s important to understand this distinction because you want to find the people for your talent pool who’s eyes light up when you talk about learning and being challenged. I call it the ‘sparkly eye syndrome.’ These are the people you’ll be looking at to develop the next generation of leaders,” says Ms. Robertson.
Rule #4: Know your immediate and long-term needs.
Ask yourself, where does your workforce today stand on available skills, knowledge and talent? Where will your company be in three to five years? When considering this step, make sure you identify key roles that must be protected no matter what. This includes your senior team plus others who impact your organization heavily. “If you do nothing else, study these roles. Be sure to ask the key people what they want to learn. Then provide opportunities for cross-training and growth. The keys to retaining and attracting leaders who are highly motivated and talented, is to provide exciting work, career growth, learning and development,” says Ms. Robertson.
It’s important to be clear that strategic succession planning is about more than just replacing positions as they vacate, says Ms. Robertson. “It’s about developing the people you want working for you. It’s about showing them you care by telling them what’s expected of them, linking their work to the strategic direction of the company, and then giving them what they need in order to deliver their best.”
Companies that put succession planning on the back burner will pay a price, she warns. “If you are only focusing on the dollars, you may get those dollars today but you won’t get the dollars tomorrow. You simply won’t.”
Dawn Robertson is a principal and co-founder of Strategic Change Resources, a Rhode Island-based management consulting firm specializing in organizational change, team building and executive coaching for domestic and global businesses. With a candid, pragmatic approach that has made her a sought-after and trusted advisor, Ms. Robertson has helped high-level executives at many Fortune companies solve business issues including transitioning new leaders, restructuring for global expansion, improving work flow, and building high performance work teams. For more information about strategic succession planning or any related topic, please contact Ms. Robertson at or call +1.401-861.3419.
