As I prepare for the presentation, it occurs to me how much of what is accepted best practice for nonprofits applies equally to small and mid-sized businesses. But first lets clarify what succession planning is and isn’t.
Succession Planning does not mean that the current CEO is stepping down immediately or in the short term. Effective, sustainable organizations are always looking to develop their future leaders and understand the importance of having a contingency plan in case the current leader is hit by the proverbial bus.
a. The first is the creation of an Emergency Succession Plan (for the “hit by the bus” scenario) that outlines who will do what to ensure stability in a situation where the organizational leader is suddenly not at the helm. This scenario often includes the hiring of an interim leader while a search is conducted.
b. The second activity is described as “defined departure” succession planning. In this scenario, the leader has announced that at some point in the future, she/he will be leaving and a longer- term plan is created to conduct a search – internally or externally – for a successor and develop a transition plan.
c. The third activity overlaps, underpins, and reinforces the first two. This “strategic leadership development” is the conscious development of identified potential leaders in the organization to ensure future sustainability and continuity of the organization.
In a previous career as a Corporate Executive Recruiter, I learned the phrase “Borrow, Buy, or Build” as applied to leadership development and succession planning. In the sudden absence of a leader you can “borrow” talent through the hiring of an interim (or temporary executive). Hiring a consultant or outsourcing part of the job is also a way to ‘borrow” talent. “Buying” talent usually means going outside the organization to hire experienced talent at the going market rate. While there are times when this strategy makes sense (new ideas and strategies may be needed), it is often the most expensive choice because of the failure rate of a good match between talent, expectations, and culture. Building your talent internally is the most effective way to ensure continuity of the organization as knowledge is passed down, and identified future leaders help to set strategy. It has the added benefit of helping to retain and engage high potentials who seek development, training, and new challenges.
So if succession planning and leadership development is a good strategy for building sustainability, effectiveness, engagement , etc., why don’t most organizations (nonprofit/business) have one? First is the reluctance to think about “replacing” the current leader. If this person has no plans to leave, the idea of starting this discussion seems emotional or painful. It is often up to the leader at the top to instigate and then support succession planning and leadership development activities. Next are excuses such as, it costs too much, we are too busy for this now, we don’t have an obvious successor on board, or, “I don’t want to upset everyone else by singling out 1 or 2 people”. In my opinion, all of these fall under short term comfort at the expense of long term gains.
Bridgespan Group, in recent research, says that nonprofits “tend to frame the issue very narrowly as “succession planning,” a term it says suggests search to replace an Executive. “That search may be frantic or it may be well planned and executed,” Bridgespan says.“But in any case, it is an intermittent, isolated activity.” In comparison, the most successful succession planning “is not a periodic event triggered by an executive’s departure,” it says. “Instead, it is a proactive and systematic investment in building a pipeline of leaders within an organization, so that when transitions are necessary, leaders at all levels are ready to act.”
One last thought for nonprofit and business leaders – especially those that are founders or who have been in their jobs for a long time. Think you’re not ready to hand over the reins or developing your successor? Ask yourself these questions (derived from Compass Point’s Am I Still the Leader This Organization Needs?):
a. In what ways will this organization/business be changing over the next 5 years? What skills will it take to lead those changes? Do I have them?
b. What level of excitement do I feel most mornings on my way to the office?
c. What new skills have I developed over the past couple of years? Am I still eager and open to learning new things and developing my skills?
d. Do I continue to be effective in building the leadership and management skills of my direct reports? What new duties or responsibilities have I handed over to them in the past two years (and let them do without interference or constantly second-guessing)?
e. Can I conceive of a career move that would potentially excite and re-energize me? Or will I be bored and without meaning to my life?
For my nonprofit readers, hope to see you at the seminar on November 1st where we will provide a roadmap for succession planning. For business leaders who have an interest in learning more, contact me to continue the conversation.