Forget "succession planning." Instead think "leadership development."
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The headline in the Journal story shouted "Too Many Companies Lack Succession Plans, Wasting Time, Talent." It's a story that many publications have picked up on lately. And most of them get it wrong.
They get it wrong because they think it's a board and c-suite issue. Here's a quote.
"It's a basic rule of management, yet one that more and more corporate directors and chief executives seem to be ignoring. Only about half of public and private corporate boards have CEO-succession plans in place, according to a survey by the Center for Board Leadership with Mercer Delta Consulting. This is the case even at giant global companies that have thousands of employees and spend millions each year to recruit and train talent. Succession plans for the corner office are best made long before they're needed."
Forget succession plans. Think leadership development. Succession planning is all about having "a name in an envelope" to replace the CEO. Leadership development is about having two or more qualified replacements for any management position.
Because most of these articles concentrate only on CEO succession, they look at the wrong time frame. Here's another quote from the Journal article.
"'Succession planning isn't an event, it is a process that is best managed over three, five, even 10 years,' because it involves building a pipeline of talent, says Joseph Bower, a Harvard Business School professor and author of The CEO Within: Why Inside Outsiders Are the Key to Succession Planning."
Forget "three, five, even 10 years." Think career.
It is a process, but it's a career-long process for lots of leaders. Considering CEO succession without considering the leadership development that happens throughout the careers of executives is like discussing what kind of shingles are best for the roof without making sure the foundation of the house is solid.
The great strength of leadership development programs at companies like GE, Proctor and Gamble, Pepsico, Sonoco Products and Colgate Palmolive is that they produce great leaders who develop over a career.
The column says that GE's CEO Jeff Immelt "underwent a three-way, two-year-long race to succeed his predecessor Jack Welch." That's only part of the story.
Immelt joined General Electric in 1982, 19 years before he became chairman and 17 years before the "two-year-long race." Like Jack Welch before him and Reg Jones before Welch, Jeff Immelt was shaped and developed by GE before he got a shot at shaping the company.
If you raise up good leaders from inside you won't have to spend so much time worrying about "having a name in an envelope." You won't have to worry about first-rate leadership at all levels of your organization. And you won't have to worry about succession planning. All you have to worry about is developing and retaining the men and women who will lead you into the future.
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Wally Bock has helped people learn to be great bosses for more than a quarter century. His latest book, Performance Talk: The One-on-One Part of Leadership, makes learning key leadership principles almost effortless by teaching through a story and providing lists of resources for further growth.
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Good going with this one, Wally.
Got a call today from someone wanting to "do a Talent Management Program." After asking some diagnostic questions, it was clear that the intention was solid but the solution was boilerplate--and off-target.
I spoke with the new CEO about it and he has a different take and one that will serve the company well. His approach: we hire people who can fit into three different roles, then give them opportunities to perform and grow in each over time. When executives "move o",, there is a proven cadre of leaders.
He's got a book with names. But every position has three names that could fill it at a given moment.
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Thanks for the note, Steve, and the example of a CEO who's thinking beyond immediate succession.
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Greetings!
That sounds like a better and more practical solution. Already having a name in the envelope just limits the company to one choice. And what about all the other untapped potentials in the office? Plus, it's more fair that way.
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I keep thinking about the human dimension behind Wally’s obviously correct point.
Most people with functioning brain cells will acknowledge that grooming future leaders by reinforcing and rewarding leadership aptitude makes basic good sense. But it doesn’t happen, in part, because potential leaders often self-identify early, have a bit of that early egoism, chafe at being unchallenged, suffer slights - real and imagined - as part of intramural struggles, and require more “big” responsibilities than some organizations realistically can offer. Plus they’re very susceptible to being recruited by headhunters and talent spotters.
I have direct knowledge of three situations where an obvious “heir apparent” left because the big boss wasn’t ready to go yet, and no amount of compensation could override that sense of being under-utilized.
Granted, this is only part of the more pervasive problem of organizations not recognizing and nurturing line and mid-level leadership talent. I just keep pondering the psychology of it all. People who are not afraid to lead - even thrive on it - break out of the pack early, and tend not to be inclined to wait patiently.
GE had tasks to offer Mr. Immelt that kept him engaged and stimulated. Many organizations simply don’t have that ability – apart from whether top management is truly generous or wise.
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Thanks for adding that point, Shaun. It's true that many companies, and not just small ones, don't have enough of the right opportunities for some of the leaders I call "Strivers." Those folks will seek opportunity and glory elsewhere if they don't find it in their present company. But that's not a bad thing if they've contributed while they were with you and helped you developed good people. Steve's example of the CEO with three-deep bench strength at most positions is needed, in part, because of stars who leave.
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Wally,
One of the grave shortcomings of the approach you so rightly target is its focus on the top, as though all the people below were merely place-holders.
I think the focus on the CEO is unfortunate. The best run companies can keep going without one for as long as it takes to find the next one, because, at bottom, the best ones don't run the company. Those who try usually just run it into the ground; in that case you'll need a good successor to pull it back out. But the best ones know that they are really the place holders - what they provide is a command environment that develops and supports the managers and employees at every level who are busy keeping things humming.
Senior managers need to learn to look at themselves as support staff. They help, with the board, to generate strategy, then they allocate assignments and capital. But after that, their real work is to monitor, and to help create the conditions for success.
Your critique of "names in an envelope" is perfect.
Thanks for a great essay on this peculiarly persistent problem.
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Interesting arguments. I look forward to reading more.
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