Editor’s Note: This article was co-authored with Dr. Audrey J. Murrell, Associate Dean of the University of Pittsburgh College of Business Administration and director of the David Berg Center for Ethics and Leadership. The article is Part 1 of a three-part series on succession planning as an important function for organizations. Mike Fucci is Chairman of the Board of Deloitte.
It’s difficult to imagine two topics more important for an organization than succession planning and leadership development. Without strong leaders and a process for replacing them when the time comes, the prospects for enduring growth and success can be dim.
Let’s face it, an organization is only as good as its commitment to developing its leaders.
Based on our experience in business and in academia, succession planning is insufficient, or in some areas such as higher education, an afterthought that only receives attention when a need or vacancy occurs.
Recent data reinforces what we’re seeing. According to the National Association of Corporate Directors, fewer than one in four private organization boards say they have a formal succession plan in place. A recent article in BizEd Magazine reviewed a survey of more than 400 experienced and new deans who reported that their moves into leadership positions had been unanticipated, had not been one of their long-term career goals, and that they did not receive training to prepare them for the demands of leadership. In addition, Deloitte’s 2016 Human Capital Trends report revealed that nearly 30 percent of organizations have weak or very weak leadership pipelines, and nearly 90 percent of organizations see this as a critical challenge.
Challenges to Succession Planning
So why aren’t organizations creating strong leadership pipelines? For one, present-day challenges can be all-consuming, leaving little time for current leaders to focus on future leadership. In some organizations, leaders believe succession planning will occur naturally, relying on the traditional next-in-line approach. For some organizations, the prospect of creating and sustaining an effective approach to succession planning can be seen as too complex, too expensive and too time-consuming. The irony of this view is that when managers or faculty members within higher education are thrust into leadership roles, this can be an expensive way to select and deploy new leaders.
While these reasons are understandable, prioritizing succession planning has benefits that can outweigh the challenges. It’s that important. Placing a high priority on developing the pipeline of leadership—often referred to as “leadership bench strength”—is no longer optional in today’s environment. Without a seamless transfer of power, business operations can grind to a halt, high-performing professionals can become bored and leave for other opportunities, clients can look for a better experience at a competitor, and the organization can face a leadership gap that can reduce overall effectiveness. Without the proper mentoring, coaching and development of university faculty, leadership positions in higher education can be left to those who are not ready.
Positives that Permeate
Strong succession planning can provide benefits by expanding the pool of competent candidates. This can be accomplished by starting professional development earlier in a professional’s career and providing him or her a variety of experiences. It can create a sense of ownership among the candidates who recognize the investment their organization is making in them. Developing a strong leadership bench can encourage innovative thinking through diversity of thought. This can be important throughout all levels of the organization, not just in the level of senior leadership. For example, at the University of Pittsburgh, the David Berg Center for Ethics and Leadership has developed the Certificate Program in Organizational Leadership and Ethics, which builds the pipeline of leadership among staff at all levels across the university. Now in place for five years, the program has supported over 1,500 staff to completion, a number of whom have transitioned into different roles and responsibilities at all levels of the university.
Succeeding at Succession
Given the factors that make succession planning relevant in both corporate and higher education institutions, organizations should consider taking a hard look at their process, or put one in place if none exists. While succession planning is not a one-size-fits-all prescription, we believe there are eight components that many successful approaches share:
- Start Early: Leadership development can take five to 10 years; it’s important to identify high-performing professionals early in their careers and start them on the leadership candidate path.
- Assign Strategic Stretch Experiences: Getting professionals outside of their comfort zone is critical to preparing them to lead. Stretch assignments build new skills, create invaluable experiences and provide a more complete picture of the organization.
- Invest in Innovative Training Programs: Experience is critical, but learning through courses, role-playing and customized development plans can be valuable and should not be overlooked.
- Stress Diversity of Thought: As the professional talent pool becomes more global, an organization’s succession criteria should reflect that diversity. This can not only broadens the pool of likely candidates, it also can bring to the forefront two important components of innovation—diversity of thought and perspective.
- Create a Committee: Having a committee devoted to succession planning helps reinforces the importance that an organization places in future leadership. At Deloitte, for example, the Elected Leaders Succession Committee (ELSC) was transformed from a reactionary process into a dynamic committee that is fluid, transparent, ongoing and always focused on succession planning. The ELSC is constantly identifying CEO and chairman candidates and cultivating them so they can hit the ground running when the time comes.
- Get Buy-In from Leaders: Without a doubt, succession planning is an executive-level issue; continuous collaboration between management and the board of directors is often essential.
- Make it a Process: The transfer of leadership is not a one-time event. Organizations that create an ongoing, flexible, multidimensional approach are more likely to avoid the disruption associated with the loss of a leader.
- Get a Sponsor: Even the most talented, high-performing professionals need an influential senior leader to advocate on their behalf. Sponsorship can be the pay-it-forward aspect of successful succession planning. (The valuable impact of sponsorship is a topic that we previously explored in three parts. Read Part 1, Part 2, and Part 3 of that series.)
Our goal for this series is to spark a conversation around leadership development, and from that conversation, to open up opportunities for collaboration on approaches that can be shared across sectors. Imagine moving from having too few qualified leadership candidates to having too many. Now that’s a good problem to have.