Planning for Succession
Imagine this scenario: your company is acquired by another firm, triggering changes in the retention agreements for all of your C-level executives, allowing them to leave en masse. And they do. This situation is what Kellwood Company, the apparel designer and manufacturer, faced in 2008. While losing the majority of senior leadership would have sent many other companies into a panic, the situation did not bring Kellwood to its knees, according to Scott Mannis, Senior Vice President of Human Resources. Instead, Scott and the new owners consulted the succession plans the company had in place to identify who would ascend into the vacated roles, and where they would have to go outside for talent. The transition to the new leadership team, while not entirely trouble-free, avoided a lot of the turmoil such changes create because the company had been actively preparing the new leaders for the roles for the last several years.
While your organization likely will not face such a major leadership disruption, you should always be preparing for the unexpected. Any key leadership vacancy can have an impact on your business; being prepared for such an event can minimize the negative impact. Below are some tips to help you plan for leadership succession.
Identify critical roles first: Many succession planning efforts start with looking at who would be good candidates for succession. A better way to start is to identify the roles critical to the business. Starting with critical roles allows you to find your succession gaps and focus your attention on filling those holes.
Look for depth: In mid-sized to larger organizations, having only one person on a succession plan for a role can create a false sense of security that there is adequate coverage. To add depth, look for individuals who might be able to fill the role in 1-2 years or 3-5 years as a back up anyone who is ready today.
Engage the individuals: Don’t just assume that because someone is on a succession plan they will be ready to fill the role when you need them. They need to be actively engaged in their own development so they will be prepared when they are needed.
Revisit often: A succession plan is a living document. Pull it out regularly (at least twice a year) to make sure the succession lists are still valid. Are the judgments you made last year about a succession candidate’s readiness still accurate? Has someone else risen in the organization and should be considered for succession? How have those on the list been developing?
Leadership succession planning is one of those topics like insurance: you can’t start working on it when you suddenly need it. Start planning today for what may come.