A leadership succession strategy is a process for identifying and developing internal people with the potential to fill key business leadership positions in the company. Successors may be fairly ready to do the job (short-term successors) or seen as having longer-term potential (long-term successors).
Succession planning often manifests itself as little more than the mechanical process of updating a list for managing the talent roster across an organisation, noting their ‘high potentials’. Consequently, succession planning is too narrow to uncover and correct skill gaps that can derail even the most promising young executives when they step up.
Businesses that do develop deep and enduring bench strength, and subsequent leadership succession, approach the challenge as succession development, rather than succession planning. There is substance to the different approaches, it’s not just nuance.
A recent survey showed that top companies actively implementing succession development for their high potentials share common traits:
- Have a formal process in place for identifying individuals who are likely to assume leadership roles in the future.
- Provide career tracks for high potential individuals that are separate from those for high potential leaders.
- Accelerate the leadership development of high potentials leaders.
- Deliberately fill middle management positions with internal candidates as part of their succession development strategy.
- Promote CEOs from within if possible.
This highlights the role of succession development in both the broader talent management strategy and its contribution to the performance of an organisation. It is genuinely ‘development’ oriented rather than simply ‘replacement’ oriented.
Leadership succession is a critical strategic issue for attracting and retaining talented leaders. You need to be effective at spotting gaps in your leadership talent pipeline, and identifying important linchpin positions, to enable the company to make certain that the right people are moving into the right leadership roles at the right time, and that gaps are spotted early.
By marrying succession planning and leadership development, you get the best of both - attention to the skills required for senior management positions along with a learning system that helps managers develop those skills.
Whereas succession planning generally focuses on a few positions at the very top, leadership development usually begins in middle management. Combining the two functions into a single philosophy allows companies to take a long-term view of the process of preparing middle managers, including those below director level, to become general managers.
Succession development should focus intensively on linchpin positions, roles that are essential to the long-term health of the organisation. They’re typically difficult to fill, and those critical for the future. By monitoring the pipeline for these roles, companies can focus development initiatives on ensuring an adequate supply of appropriate talent. The result is a pool of potential successors rather than a few leading contenders. Make it transparent to improve retention rates and manage attrition rates.
So, who are your high potential leaders? Where are they in the organisation and how are they being managed and developed? Where are the succession leadership risks in your business, and consequently on which high potential leaders should the organisation be focusing its development efforts? Do you have a process for identifying star leadership potential?