Are You Planning For Succession?

Are You Planning For Succession?

By Judy Olian**

Jack Welch of GE nurtured multiple successors and triggered a fierce competition among three highly qualified internal candidates to succeed him as chairman and CEO of his mega corporation. The two candidates who didn't get the top job at GE immediately took CEO positions elsewhere. It's rare to have such bench depth. The norm is usually more similar to the sorry sagas at Honeywell, Lucent, or Xerox, where previous CEOs are called back after retirement to assume the leadership position, in light of the failures of their successors.

Few things derail a company as rapidly and fundamentally as the absence of a smooth succession at the top. This takes years of attention to development of talent from within at all levels of the organization, across all functions, so that there is significant talent across the range of leadership and executive positions in an organization. Continuous development, job expansion, and promotion opportunities are key factors driving the decision to remain with a company among young knowledge workers.

That's the essence of development of succession. But data suggest that only 25% of organizations have systematic succession systems, says Andrew J. Sherman, author of the book, "Parting Company."

Succession readiness does not occur overnight. Several basic elements that are important:

• Individuals who are prospects for senior level positions should be systematically rotated across functions.
• The top management team should sit down at least once a year to consider option for sudden vacancies in all senior management level position. Are successors being prepared for each position?
• Lateral transfers should be accepted and practiced to develop skills outside one's area.
• The company should practice a bias towards promotion from within, to provide incentives for key talent to remain within the organization.
• The performance review system for managers should require all managers to develop their staff for promotability.
• There should be a policy of continuous learning at all levels of the organization, such as a minimum number of required training hours.
  

Succession planning requires an active culture of movement across, as well as up, so that individuals are constantly expanding their skill sets and creating readiness to assume general management responsibilities. That does not happen overnight, and yet without it, companies can falter overnight