The recently concluded HBO show Succession was a hugely entertaining and successful satire on “the owners of a global media conglomerate and their fight for control of the company amidst uncertainty about the health of the family’s patriarch.” (The quote is from Wikipedia). The show showed very vividly the chaos that can ensue when there are no clear instructions on who should take up the reins of the company when the head passes away without warning.
Planning and managing succession is a vital ‘risk mitigating’ endeavour in any company. It addresses the probability of suddenly losing a valued leader to another company, retirement, illness or worse. It ensures stability and long-term health of the company. It is for these reasons companies’ boards check to see if proper ‘Succession Plans’ are in place for senior and critical positions.
Formal succession planning requires companies to identify all positions that are critical to their success. Some of these positions may not belong to the C-suite. Leaders identify internal (and occasionally external candidates) who are a good fit for these critical positions, and who are then prepared for the transition through job shadowing, mentoring, coaching and training.
This proactive approach to planning succession has several benefits:
- We protect the company from the shock of unexpectedly losing a critical employee. You could say that we ‘future proof’ the company.
- We gain a comprehensive and current picture of which roles are critical to the company.
- We start to put together a list of our most promising and accomplished employees, in other words, the next generation of leaders.
- We are able to proactively plan for the professional development of the chosen candidates for succession.
- We are able to effect a structured and comprehensive hand-off from senior leaders. This ‘knowledge transfer’ usually suffers when it is done under stress.
There are a few secondary benefits too that can come from planning succession. Senior leaders get to explain what they do and why they do it to the next cohort of leaders and in the process, identify what they are doing that could be improved upon or even jettisoned. The company also ensures that there is continuity not just in business operations but also in the organization’s culture. Candidates are chosen not just for their competence but also for how well they fit in with the values and culture of the organization. Senior leaders can thus shape the legacy they want to leave behind. Employees know that career development opportunities exist in their company and this helps companies retain their best and brightest. When this entire process is done with transparency and fairness, trust in the company goes up and even those who are not selected to succeed will be able to deal with their disappointment and stay.
Although these benefits are significant, several companies struggle in this area. Reasons could include short-term thinking, resistance to change, and resource constraints. In some instances, the board may even perceive the senior leader as indispensable.
Please share your thoughts and experiences on this practice in the comments section below.