How to build a succession plan

Succession lacking in the C-Suite
Companies everywhere are concerned about having a reliable successor for the CEO but plans for other seats around the executive table seem a little murky – including for the CHRO, according to a recent Korn Ferry study.

CHROs, the position most responsible for talent recruitment, retention and development throughout an organisation, aren’t faring well when it comes to preparing successors of their own. Korn Ferry’s survey of 193 CHROs found that leaders are concerned about who will succeed them.

About two in three (66%) CHROs said they don’t feel there is an internal successor ready to take over their role. Only about half (52%) reported having a comprehensive succession plan.

When asked about the capability gap that they are most focused on developing in their direct reports, 44% said strategic thinking.

Want to know how you can get promoted into the CHRO role? Click here to read more.

But this is not the case for Hilton’s outgoing Asia Pacific CHRO, Brendan Toomey.

“I’ve rested my growth opportunities on the fact that I’ve always left somebody behind to step into my role,” he told HRD.

“If you as a leader are able to grow successes, then you will have further opportunities. This is something we emphasise to our leadership teams when we run our leadership programs.”

Toomey is retiring from his post this year and when we spoke with him in 2018, he was confident that “hand-on-heart” he had two or three people in the APAC team whom he believed can step into his role at any time.

Who’s to blame for the lack of successors?
Why is there currently a lack of sound succession plans – especially when your organisation’s leadership is dependent on it? If we look at the business landscape, job-hopping is a common occurrence across markets.

Additionally, it’s slowly shedding its negative stigma. While frequent job changes in a short time span can be concerning, instead of branding them “disloyal”, employers are acknowledging the positive impact it has on talent, according to a recent Robert Half study.

They understand that employees who bounce from job to job are more flexible with wider experiences across industries (43%), learn faster (35%) and acquire more skills (31%).

Yet switching jobs on a regular basis can also have significant downfalls. Employers pointed out things like losing out on promotions (43%), missing out on professional development (39%) or job opportunities (39%), and less influence on company strategy/policy (33%). All of which are crucial for a solid succession plan.

Is job-hopping killing your chances at getting promoted to a senior leadership role? HRD finds out.

To make things worse, the practice is not even limited to millennials. Although 63% of employers believe it is still overwhelmingly more prevalent among younger workers, 39% view gen-X workers and 25% of baby boomers as guilty of itchy feet as well.

Can HR pivot in time to prepare the organisation for future growth?

Succession planning for the future workplace
We spoke with Azri Nawi, a senior HR leader who’s managed major corporations to find out his thoughts on how to head succession strategies in the changing landscape.

“In the future of work, I see a situation where the gig economy will co-exist very comfortably with the traditional employment structure,” Nawi said.

“This situation will influence succession planning in such a way that more and more organisations will become more comfortable with including external candidates as part of their succession discussion and action planning.”

Nawi believes some leaders underestimate how crucial succession planning is for an organisation’s growth.

“Succession planning can just be a paper exercise, but it has to be more than that to be effective,” he said. “It cannot be a checkbox exercise where leaders just go through names and put them up on their slides and say, ‘this is where we are, we’re good and have covered all positions’.”

To counter the trend of employees leaving prematurely, he said it’s important to identify high-potential (HiPo) employees early on and consider their professional development beyond just leadership courses.

He suggests putting them on stretch assignments to allow them to learn faster and be ready for a leadership role even before they can go about their untimely exits.

Even if these employees do leave soon after the investment and growth opportunity, Nawi shared that employers should let them leave gracefully. This is because future talent will look at their employer brand and value proposition in terms of how well the organisation treats employees who leave.

Also, since many organisations may not have enough internal candidates ready to step up, HR can also proactively look externally for potential future leaders.

“HR needs to be open to integrating external candidates as part of the organisation’s talent management and succession planning,” he said. “It is what I term as ‘succession ecosystem’, which includes candidate mapping by recruiters and a follow-up by key hiring managers in keeping in touch with candidates who may not be ready today but may be ready to join the organisation in the future.

“A proactive succession ecosystem will ensure an organisation can seamlessly operate in the future of work without worrying which of the key employees are going to leave tomorrow. This will leave the hiring managers to focus on what they do best – i.e. run the business.”

After all that, if there’s anything to leave with, take these words from an experienced HR professional about his greatest lesson as a leader.

“Your single-most important responsibility as a leader is to build succession,” said Brendan Toomey. “Without that, you really don’t have anywhere to go. We’re only going to say to you, ‘who do you have to replace your role?’ [If there’s nobody], it might prolong your career in that particular job.”