Succession planning is an age-old practice. In fact, it was a core tenant of the survival of many civilisations, with dictators and political leaders focusing heavily on cultivating the proteges they felt were most fit to fulfil their vision and continue their legacy.
Today, succession planning is critically important at a corporate level, with over 80% of Fortune 500 companies having formal succession plans. These plans - when implemented effectively - ensure the future success and solvency of a company long after the visionary founders, business owners, and current managers move on. But with millennials and future leaders job-hopping more than ever, it is becoming increasingly difficult to cultivate and retain effective leaders.
So what are the proven elements of a good succession plan that ensure today’s companies are building tomorrow’s leaders?
Mentoring as an informal process has long-been one of the most used and useful succession strategies. And it’s just as popular today, with over 70% of Fortune 500 companies choosing to run formalised mentoring programs. Great leadership teams who want to leave a legacy beyond their tenure ensure that aspiring leaders are supported through mentorship. Mentoring fulfils all the elements of a good succession strategy: providing potential leaders with ongoing skill development, leadership development, communication skills, the right network - and a heap of confidence.
Making mentoring a more formal business practice enables companies to consistently bring untapped talent off the sidelines - and expands the pool of potential leaders. The best organisations, just like the best sports teams, have a long and structured pipeline with which to support and mentor their talent into, through, and out of; meaning less time and money spent recruiting, training, and getting people up to speed on tacit company knowledge.
Promote from within
One of the best ways to stifle future leaders and high potential employees is to hire new, more ‘senior’ people to manage them. The type of employees who you want to focus your succession efforts on are the type of employees who want to be entrusted with more responsibility; the type of employees who want to be promoted and given new challenges. In fact, being overlooked for a promotion is the reason that 24% of all employees say they’re open to jobs elsewhere (so imagine how high this is for the aspirational ones). The enemy of these employees is stagnated growth, restricted autonomy - and limited opportunity.
Instead of looking outside of your organisation next time you are looking for a divisional leader, look inside, ask questions of your current staff - and give good employees the chance to prove themselves.
There is no substitute for experience - especially the right experience. And the right experience involves getting one's hands dirty in many facets of a business. In most cases, it’s much more important - especially from a leadership perspective - to understand how the pipes fit together than what actually runs through the pipes.
There is a reason that 40% of CEOs among Fortune 500 and S&P 500 companies come directly from COO positions; operations people have their finger in a lot of pies and a deep understanding of how the business operates. Enabling employees to rotate, confer with, and work in other divisions and positions provides them with a holistic view of the company and its people. Bringing in a successful leader, even one with industry experience, does not replace years of domain experience within your company.
Focus on the mission and vision
The last proven way is a little less tangible than the rest - but is a critical part of any succession plan. Many business owners and leaders struggle to understand why their employees aren’t as passionate about the business or vision as they are. Part of the issue is an incentive issue (normal employees aren’t set to gain as much from success), but another part is being transparent about and articulating the mission and vision of the organisation - with more than two-thirds of employees failing to even understand their company’s vision.
A great CEO or leader’s job is to constantly reinforce and articulate the why - as well as the how - of the company. When it is done right, it works wonders: more than 50% of employees from high performance organisations believe their leadership team has an inspiring vision, compared to 24% from low performance organisations.
In the good old days of succession planning, dictators used to cultivate their successors by strategically embedding their ideologies and philosophies into their proteges. Business leaders must do the same thing (all positive ideologies and philosophies of course). They must disseminate their own mission and vision so that people want to stick around and align their career with the company’s mission.
Succession planning isn’t easy. And it isn’t always seen as a priority in a hyper-results driven and often short sighted marketplace. But, it is critical to building an organisation which can survive and thrive in today’s quickly evolving world - because successful leaders and their companies will look a lot different in a few years time.
And unfortunately, even the ‘plan’ only goes so far. The elements of a succession plan must become institutionalised, advocated for, and executed on - in order for them to translate into tangible business results and change.
But if you do successfully plan for and execute on these four proven tenants, you are a long way to ensuring that your company today - is far more prepared to fight for another day tomorrow.
Author: Lance works for Mentorloop - the mentoring software platform which makes building an effective company mentoring program easy.
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