What do corporations, government agencies, and nonprofits have in common? They all struggle to handle well the succession of their top person. Why is this? A myriad of reasons, but a few that we see repeatedly are echoed in a good article by Ana Dutra and Joseph E. Griesedieck, Planning for Your Next CEO: It's High Time for Boards to Get Succession Planning Right.
The authors are right on in their observation that CEO succession all too often becomes at best an exercise in damage control and at worst an unseemly scramble that can hurt a company, shareholder value, and public perception.
So why doesn't succession planning get the "planning" it deserves? According to the authors' research, for CEOs, spotting the talent that will eventually replace them can be an unwelcome intimation of executive mortality. For boards, bringing up succession can feel awkward when things are going well - when they're not - it can feel like a threat.
A few of the solutions include:
- When CEO succession is a regular, structured process that forms part of the board's agenda it becomes a matter of routine, as normal of a discussion as the annual compensation review.
- Boards should view CEO succession as a strategic process intimately related to the organization's performance.
- Begin planning for CEO succession the day a new CEO starts. While internal candidates aren't always eager to be compared and benchmarked, as long as it's done in a consistent manner, they'll view it as part of their own career development plans.
Organizations with a fair, objective, and transparent CEO succession process will find it easier not only to attract and retain top talent, but to execute strategy which is the key point: consideration of any candidate should start with unanimous board agreement around the corporate strategy. For example, if a company is looking to do significant acquisitions as a part of its strategy, it would require a CEO who is a great communicator and skilled at culture integration. But if the company is planning to focus on its core business, a CEO candidate with extensive industry and operational experience may be best.
In our management consulting work, regardless of the change initiative the client is undertaking, to gain traction and deliver results, successful change starts with alignment around the organization's strategy. Never pass up an opportunity to test for agreement on strategy (or strategy execution) with your top people. Discussion about CEO succession is a perfect catalyst for discovering (and doing something about) disagreement within the board or leadership ranks around the strategy and how to execute it.
2010 Copyright © Moore & Associates
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