Managing the unexpected
Unexpected leadership departures can be a serious blow, with the impact permeating throughout the organisation. Managing these unexpected transitions is essential, particularly in financial services where critical roles are a regulatory requirement. Above all, having a robust succession plan in place was considered the most effective strategy when dealing with unexpected departures. “Revert to the plan,” was a common answer. However, succession does not always go to plan, and most of the organisations we spoke to used additional approaches to mitigate and manage unexpected departures.
The interim and ‘emergency’ successor
Many financial services organisations said they would bring in an interim executive in the event of an unexpected departure. For smaller organisations with a smaller pool of internal talent to draw upon, this was often a necessity.
Almost all maintained a list of emergency or ‘acting’ candidates as part of their succession plan. These individuals understand they are only temporary while the permanent replacement is found. If it turns out they are not right for the role, they are allowed to “exit with dignity,” and provided with transition support.
A combination of internal and external temporary placements can be used. As one global HR leader explained: “we have internal emergency cover candidates and when they’re not available we use interim executives from external providers.”
Similarly, large global financial services organisations told us they could “parachute in someone from HQ.”
Although, this appeared to be more of a ‘last resort’ than a process to rely on.
Part of this is the need for a broader set of skills, particularly at board level. New technology and data leadership skills are not always available within incumbent financial services organisations, so need to be brought in from the external market.
Keeping talent interested
Many HR leaders we spoke to tried to prevent unwanted departures before they occurred. Planned rotations were incorporated into succession plans, providing succession candidates with different professional experiences. Other HR leaders we spoke to used executive coaches for those they were “trying to groom, and thereby hold on to key talent.” Another Chief People Officer told us their organisation used psychometric testing to understand candidates’ personality and motivations to get a picture of who might leave and for what reasons.
Working with an executive search partner
Based on our interviews, HR leaders frequently addressed unexpected departures by enlisting the assistance of a trusted executive search partner. Speed and selection were the benefits here. Several interviewees told us bringing in an executive search firm meant they could move much more quickly toward shortlisting and candidate selection, and so minimize the impact of a leadership gap. Indeed, by leveraging an established candidate network, an executive search firm can expedite the creation of a shortlist while simultaneously enhancing diversity in the candidate pool.