We’ve interviewed over 30 chief executives so far on The Leadership Café webcast and have come away   with a number of enlightening insights. One of the more telling lessons from these extraordinary leaders was that the organizations that had intentionally focused on developing their pipeline of leaders prior to COVID were more effective in responding to the challenge and bouncing forward. Our webcast guests referred to this as, “future-proofing our workforce” and “building organization resilience”. Research has always shown the benefits of a robust talent pipeline; the unique challenges 2020 have significantly highlighted the payoff.

On the downside, research has also underscored how many organizations struggle with succession planning and building their talent pipelines. For example, a study conducted by Deloitte in 2018 reported that “86 percent of leaders believe leadership succession planning is an ‘urgent’ or ‘important’ priority, only 13 percent believe they do it well.”

In this article, I’ll review some of the reasons why organizations struggle with succession planning that makes a difference. I’ll also review three solutions to help build a succession planning process that reskills leaders, builds agility and prepares organizations for the next challenge.

Succession Planning Derailers

In a previous whitepaper, I highlighted 12 reasons why an organization’s efforts to “get the right people in the right roles doing the right things” might get knocked off track. (Check out Talent Management Derailers.) Many of those “derailers” apply to failed efforts to build a robust pipeline of talent but I think three create the most problems.

1. Lists for Lists Sake. Historically, organizations go through succession planning to create “backup” lists for leadership positions – employees that could replace a leader if they moved out of the role. But we find that the hit rate (when someone from the list is actually placed in the position when a vacancy occurs) is often very low, typically around 15 – 20% of the time. That means all the time spent on creating backup lists has little value.
2. Living in the Past. Much like the focus on back-up lists, much succession planning work only considers the current organization chart and current roles. But stop and think how your organization has morphed in recent years. All leadership roles have changed and some new ones have come to the forefront (i.e., Chief Data Officer, Chief Innovation Officer, Chief Equity and Inclusion Officer). To stay agile with changing times, organizations must build pipelines of talent that have the potential to fill roles that do not yet exist.
3. Mistaking Performance for Potential. This derailer occurs when an organization gives too much weight to performance in a current role to determine who to promote. Unfortunately, research has shown that most high-performers are not also high-potentials. In addition, most assessments of performance do not consider factors that really make a difference to overall organization performance.

Retooling Succession Planning: Getting Your Talent Train Back on Track

Now let’s move to some solutions for building an agile pipeline of talent for the 2020’s and beyond.

Drive from Strategy. To avoid living in the past, any effective succession planning process must be built from and start with the organization’s strategy. The first key step begins with translating the strategy into the leadership competencies that are critical to executing the strategy. The competencies should be focused on what will drive success in the future, not what was needed in the past. This future, strategy-driven perspective brings more of a workforce planning emphasis to building a pipeline and moves away from an organization chart/role focused process. Strategy-driven talent management also lays the groundwork for considering how roles will/must change and what roles might be needed in the future that don’t currently exist.

Retool Talent Assessment. The best predictor of future potential is learning agility – the ability of an individual to navigate a variety of experiences, learn from those experiences and then apply the knowledge to a new challenge. Talent assessment processes should move away trying to assess such things as “promotability” or how many organization levels we think someone is capable of moving. Instead, the focus should be on the individual’s demonstrated ability to learn from experience coupled with their aspiration – their interest in making a broader contribution and taking on more.  Performance should also be considered but ought to be viewed from a much broader perspective than just current accomplishments. We like to think it terms of “Performance Contribution” which includes an assessment of the individual’s contribution in multiple roles over time along with their contribution to others’ performance and how effectively they align their work with others and with broader organizational goals.

Focus on Development.  By basing talent assessments on Learning Agility/Growth Potential and Performance Contribution, organizations have a foundation for the next talent pipeline solution – focusing succession planning on identifying the most effective development strategy for pools of talent (and not just creating back-up lists). High Performing, high potential talent benefits from a different development strategy than individuals who are high performing but who do not aspire to be an executive. And the specific development needs of any individual are never the same. Development must be “mass customized” and matched to the personal needs of each leader. The leadership competencies needed to drive the strategy (see the first solution) are not learned from a book or from the classroom. The skills come from navigating and learning from a variety of challenging roles or assignments.

Succession Planning for the 2020’s and Beyond

Leadership development/succession planning for the 2020’s and beyond, therefore, should look like this. Talent Management/HR is regularly scanning the business strategy and translates strategy into mission-critical leadership competences. Talent assessments are completed at all levels of the organization and pools of talent needing different development strategies are identified. Talent Management curates experiences and programs career moves that help build the strategy-critical competencies throughout the pipeline. Managers spend more time on providing real-time feedback, coaching and mentoring and don’t waste time doing performance reviews. Retooling succession management (a better term than succession planning) in this fashion will help organizations reskill their leaders and build agility to be able to address whatever the rest of the 2020’s throws at us.