to 15 years, over that same period. As a result, more outsiders are being hired directly into executive roles. In 1980, 9% of C-suite executives fit that bill; by 2021, it had risen to 26%. The ultimate goal is to identify individuals who have the potential to exceed current standards — those who can surpass the current leadership in capability. If this potential is not available internally, the search may need to extend outside the company. There’s no sugarcoating the fact that it is a long and detailed process. What’s more, the market has been faced with a talent shortage, leaving key roles unfilled or filled with personnel not fit for the position.1,2 This requires a strategic approach to succession management that includes: • Creating a continuous pool of strong talent. • Aligning people with the most appropriate roles. • Enabling a business to successfully adapt and change. • Engaging talent by developing and allowing them to contribute. • Enhancing employee satisfaction and engagement. • Improving bottom-line performance through lower turnover/improved retention, cost savings and higher performance benchmark. Although succession management has been identified as a critical component for business success, organizations often fall short of “doing it right” for various reasons: • Organizations do not allocate adequate resources to developing talent, in part due to the lack of focus, attention, alignment, support and attention from senior leadership.2 • Succession management is often not tied to the strategic mission of the organization or integrated into the culture. • Succession management is viewed as a one-time event versus a process. • Organizations demonstrate a lack of follow-through on development plans. • Companies are too often focused on hiring from outside rather than promoting internally. The following are some key components of effective succession planning to consider. This plan can be modified to suit the structure and culture of your company. • Determine Key Positions: Identify the key roles within the organization for which successors are needed. If it isn’t clear based on which leaders will transition out, identify them by the critical roles that, if left vacant, could impact the company’s performance and ultimately, its success. • Initiate Open Conversations: Engaging in open dialogues forms the cornerstone of effective succession planning. It’s crucial to initiate these conversations with leaders after the first year in their respective roles, exploring their future aspirations and tenure expectations, both within the organization and beyond. Flexibility is key, as aspirations may evolve; however, it’s imperative that such changes are communicated promptly. • Identify Candidates: Pinpoint up to five candidates for each leadership position, especially for higherlevel roles, realizing that the greater the responsibility, the more candidates are needed. Ideally, this process should start at least two years before any anticipated leadership changes, allowing ample time for development and transition. And don’t put too much weight on past performance vs. potential when identifying successors. • Assess Talent: The art of talent assessment lies at the heart of preparing for the future. It’s a journey through the current workforce, identifying those with the spark and potential to step into key roles later. This quest involves a deep dive into their skills, competencies and leadership qualities. While there’s no one-size-fits-all assessment tool, a comprehensive approach is crucial. This might include a 360-degree review accompanied by a trust index, detailed analyses of multi-year performance and leadership across various organizational sectors, accompanied by a behavioral evaluation. • Engage the Candidates: Engage in meaningful conversations with each potential successor. Together, explore the insights gleaned from these assessments. Discuss their areas for growth in relation to the new role, aligning them with existing or future job descriptions and benchmarks for success. It’s not uncommon for individuals to be flagged as potential successors for multiple roles. This is perfectly fine, provided that each candidate — especially the future leader — is comfortable with the growth trajectory and that there are enough qualified successors to step into any role that may unexpectedly become vacant. It’s also okay if some candidates decide that the path of succession is not for them. • Form Development Plans: Once the baton of potential leadership is passed to the chosen successors, the next pivotal step is to formulate comprehensive development plans. These are the blueprints for equipping candidates with the requisite skills for their future roles. This might include a mix of internal and external training programs, mentorship opportunities, job rotations and other developmental experiences. Think of these as practice 21 Colorado Banker
RkJQdWJsaXNoZXIy MTg3NDExNQ==