Successful Succession Management

(07701) Robert Fulmer and Jay Conger say:

Why the renewed interest in succession management?

There are several reasons why succession management has moved to the top of the agenda again:

1. Leadership is a scarce and therefore valuable resource
2. Leaders no longer stay with one company for their careers
3. It’s important to give future leaders the right challenges
4. It’s very easy for leaders to find new opportunities
5. Executive recruiters have become very good
6. The marketplace is changing and leadership is needed

Therefore, organizations which develop great succession management systems have a strong competitive advantage over those which do not.

To expand on the reasons why succession management has become of great interest today:

1. Leadership is a scarce and therefore valuable resource.
Even after decades of effort, effective leaders are still a relatively rare asset in most organizations. There is an ongoing war for executive talent which is going to be exacerbated by the impeding retirement of the Baby Boomer executives over the next decade.

2. Leaders no longer stay with one company for their careers.
Leaders are knowledge workers - they get paid for their expertise and their brainpower. Rather than anticipating they will stay with one company, most people today expect to change careers a number of times as new opportunities arise through the ebb and flow of industries.

3. It’s important to give future leaders the right challenges.
Unless high performers are given challenges that help develop their skills, many potential leaders will have no hesitation in going elsewhere to access those growth opportunities.

4. It’s very easy for leaders to find new opportunities.
Anyone with access to the Internet can log onto the employment supersites and find interesting and better job opportunities. The increased ease and speed with which this can be done today means high performers have many job possibilities at their finger tips.

5. Executive recruiters have become very good
Headhunters today have more clout and greater sophistication. They know how to find and lure potential leaders into new positions. They also know precisely what other organizations are prepared to pay for executive talent and take advantage of any arbitrage opportunities.

6. The marketplace is changing and leadership is needed.
Organizations today need to change constantly to stay in sync with their evolving markets. As a result, organizations have needs for new talent today all the time. Gaps are appearing unexpectedly before organizations have the realistic opportunity to grow their own talent.

Taken together, talent retention and development is now of great interest to most organizations. Better information technology means it’s feasible to develop and monitor a succession management system better than could have been achieved a few generations ago. Companies ignore succession management at their own peril, because the availability of a succession system is one of the deciding factors for new hires.
In practical terms, a good succession management system will have two purposes:

1. To serve the needs of the organization - by helping provide a continuous and deep supply of talent needed to fill the gaps. Without a forward-looking succession management system, corporations will constantly need to scramble to try and fill the gaps with whatever talent is available.

2. To serve the needs of employees, especially the high performers - because they will have so many opportunities elsewhere. Unless your best people have a sense their career is moving forward, they will be inclined to go somewhere else.

To be effective, good succession management systems:

Will be simple and easy for everyone to use.

Will have a development orientation rather than a replacement orientation.

Will actively involve the senior management of the organization

Will identify and highlight both existing and emerging talent needs of the organization

Will ensure the right people move into the right jobs at the right time.

Will spot exceptional talent early and nurture that talent sensibly.

Will be subject to ongoing reinvention, enhancement and improvement.

Growing Your Company’s Leaders