The complex global business environment is challenging organizations to win in the marketplace. Regulators are taking profits from corporations, technology is changing every day the way how to transform business, while customers are becoming more demanding and showing lack of loyalty.
As a CEO responsible for driving the future of the organization and setting up the right strategy to develop new capabilities to integrate systems, products, and services, you look around and ask the following question to yourself: Do I have the right C-Suite talent and set of executives capabilities that the organization needs to boost investor confidence, deliver customer value proposition and shareholder return?
To successfully win in challenging times, organizations are designing strategic succession planning for CEOs and C-Suite executives to differentiate themselves from competitors while building a strong leadership pipeline to ensure organizational long-term growth. Having a solid succession planning process in place reduces the risk of the company being affected by having the wrong set of leaders executing strategy and leading teams in the wrong direction.
There 4 leading principles for C-Suite succession planning:
1. Make C-Suite development part of the organizational culture:
an executive leadership pipeline is critical to deliver value to customers and shareholders. The Board and the CEO need to be the sponsors and partner with C-Suite executives to drive this process in their functions. The future of the company depends on how executive talent delivers results through decision-making, customer focus, innovation and manage risk to sustain organizational success. Managing human capital and building leadership pipeline are responsibility of top leaders of the organization. HR will facilitate and assist in every step of the process.
2. Align succession planning roles/responsibilities into action:
There are different players in the C-Suite succession planning and sometimes this process fails due to the lack of responsibilities and deliverables:
a. Board and CEO: lead the steering committee and maintain C-Suite succession planning scope/outcomes alignment with corporate strategy. Assess and confirm candidate’s successions, development plans, and capability profile that are needed for C-Suite high potential individuals.
b. C-Suite Executives: are responsible to identify and run talent reviews and high potential assessment in order to identify critical talent. Executives are responsible to develop successors, create development plans and be the sponsor of career advancement. HR will partner with them to provide the methodology and the structure.
c. Chief Human Resources Officer: partner with the Board and the CEO in order to define C-Suite profiles, identify and assess internal candidates and evaluate candidates from the market. The CHRO brings technical expertise and advise on what is the best methodology and set up the process structure. The CHRO need to build trust and credibility to have that exposure and be seen by the Board and the CEO as a strategic business-people advisor.
3. Structure and process scope:
HR plays a critical process at this stage. Succession planning at the top level represents a multiyear process and involves to have clear stages: first, identify and assess candidates; second, talent bench readiness and develop internal candidates; third, evaluate candidates and select potential successors; and fourth, manage the transition and cultural onboarding. At this stage, is critical to link leadership gaps with the right leadership development strategy focused on developing organizational capabilities that candidates need to meet business future requirements. Lastly, succession scenarios analysis should be completed using a robust set of assessment tools to make the right development decisions.
4. Transition and Onboarding:
Potential succession need to have a strong transition and onboarding plan to make sure they understand roles expectations, office politics, relationship-building at different level across the organization and key deliverables for the short and long term. Usually, these programs involved a coach from the Board, the CEO or external advisors, and global project assignments to make sure C-Suite executives are going to success in the long-term.
Partner with the board to review the succession planning when the strategy and/or the organizational culture need a shit due to new corporate direction. Make sure the talent committee has the right directors for the process success.
The board is responsible to drive the succession planning for the CEO and the CEO is responsible to develop a leadership pipeline across the organization. Especially direct involvement in developing talent bench at least two levels down.
CHRO and HR leadership are responsible to assist the board/ the CEO and facilitate the process providing tools and techniques that are necessary to assess talent. HR needs to make sure development plans are tailored to the successors talent-gaps and link to the long-term strategic plan.
C-Suite candidate election should be based on facts, not intuition. Organizations need to have a strong succession planning where the Board needs to be trained on how to assess performance, competences, and potential. HR plays a critical role to assist in this process