How to set up succession for success
For our final question we sought advice from our panel of HR leaders on developing a succession plan. The predominant response overwhelmingly emphasised the importance of ensuring the plan's robustness and alignment with talent strategy. “Be clear on what is needed and plan early, with input from the board,” a Talent and People Director said. “Map the succession plan to business triggers and scenarios, and review regularly,” said another. Others said succession needed to be fully integrated into the talent plan, and this should go hand in hand with organisation design, now and in the future. What’s more, succession should also factor in the consequences of the transition.
Be honest and transparent
Most of the HR leaders we engaged advocated for honesty and transparency throughout the process. This included an open dialogue with candidates to understand career motivations, honesty about whether they could do the role, early intervention to poor performance, and giving HR the space to say “no” if they didn’t believe a candidate was ready. This also helps achieve greater alignment between personal and professional goals – critical in ensuring successor candidates stay the course and the plan is a success. Part of this was testing leaders on what their talent can do: “leaders often have inaccurate or inflated expectations of their talent, both false positives and negatives – this can lead to promoting people who are not ready.”
Don’t over-rely on the nine/four box matrix
“Rather than focus on methodology, the major success factor is true leadership commitment and a reliable frequency, flexibility, and stability in the process,” said one Global HR Director. “Most organisations use the four box or nine box matrix, but we look at potential and learning agility,” another echoed. Others emphasised the need for a skills angle rather than focusing solely on experience, particularly the development of transferable skills. This focus on skills also creates a degree of individualisation which increases the likelihood of succession plan success.
Retain unsuccessful talent
Almost all those we spoke to stressed the importance of retaining unsuccessful successor candidates. In one form or another, unsuccessful candidates were rewarded for being part of the succession programme and supported to develop skills and experience. Whether through external business education programmes or providing coaches and mentors, financial services organisations took steps to ensure their unsuccessful candidates felt appreciated and thus stayed with the organisation. From our experience, this is critical. The disgruntled successor candidate too often becomes an ex-employee, undoing much of the effort of the succession planning.
Benchmark against the market
Incorporating external talent in the succession process brings a range of benefits – so much so that many of our interviewees told us they were increasing this practice. In addition to gaining a broader view of the talent market it improves performance, competitiveness, and diversity. Understanding how the organisation's talent, practices, and performance compare to the external market helps reveal competitive strengths and weaknesses. Regular benchmarking also helps identify emerging trends in skills, technology, and industry practices, affording organisations greater adaptability. They also gain insights into what competitors offer, and so can better position themselves as attractive employers. Bringing in external talent or comparing internal practices to those in the broader market is also a key ingredient in introducing new ideas, perspectives, and practices that drive innovation and creative problem-solving.
Support your succession candidates
Finally, several HR leaders stressed the importance of ongoing support. Especially when undertaking stretch assignments and secondments, it shouldn’t be assumed the candidate can simply “step up.” Ensuring they have the tools to succeed includes providing coaches and regular feedback from senior managers and HR. Supporting successors once they are in the role is also inherent to their success as a leader. As one HR leader put it: “planning for success of the individual is part of the succession plan.”