An article in today’s Wall Street Journal entitled Sudden Leader Loss Leaves Firms in Limbo, says that according to research done by the American Management Association, more than one-fifth of senior managers say that their companies are “not at all prepared” in the event of a sudden loss of a key member of the company’s senior management team.
While this is obviously important and thanks to Apple, currently receiving a lot of attention, the issue goes much deeper. Most of the writing and research I read about the need for succession planning, is focused on senior management. To ensure effective strategy execution, more attention needs to be paid to talent requirements below the executive suite.
For example, at a biotech firm I worked with several years ago, when the program manager of a critical drug development project left unexpectedly, it resulted in the costly delay of the launch of the product. Management at the top remained constant – they simply didn’t have anyone prepared to take over the reigns.
A manufacturing executive I spoke with the recently, is concerned about the loss of an entire layer of seasoned mid-level managers, who in the past, had provided much of the informal mentoring and on-the-job training of young managers moving up in his organization. He’s worried that while they have plenty of talent, they don’t have the necessary breadth of knowledge to handle unforeseen events when they occur.
When organizations lose core elements of their internal institutional knowledge, it can be perhaps not as externally obvious, but equally devastating as losing a member of senior management.
To help make these key talent requirements more visible, companies must explicitly identify the critical talent resources they will need to execute as a part of their strategic planning process, and develop contingency plans in the event of unplanned departures.
Has this happened in your organization? How did you address (or not)?
Tags: alignment, CEOs, clarity, employee engagement, employee morale, healthy organizations, Leadership, retention, team building
Amelia, a great post indeed about the importance of both succession planning and leadership development — a subject that is also near and dear to your heart. When companies programmatically cultivate great leaders with formal leadership development programs, succession planning becomes part of the conversation about which leaders to invest in for further development. These same executive leadership development programs frequently have special assignments at their core, which often lead to succession planning. Succession planning and leadership development are so linked that I can’t separate them — and both are sweet spots for you!
The discussion of succession planning is very appropriate at this time. Once the economic recovery is in full swing and employees are able to release the pent up desire to find a more ideal career path, having succession plans at multiple levels of the organization will be a strategic advantage. Added to the planning for senior and middle management, should be focus on key “client-touch” positions. To lose employees in areas critical to a client’s business and service continuity can directly impact the organization’s bottom line, as well as customer satisfaction. Remember the adage “it takes five times the effort to gain a new customer that to keep a current one.”
Nice post Amelia. Organizations often have a narrow view as to what constitutes development and cross-functional assignments – or significant cross boundary projects – are often the most effective way of really learning and getting prepared for what’s next.
Great post Amelia, It is often the excellent managers who are mentoring their teams to success and ultimately succession who should be considered a great value to the organization yet are put in a position to ‘move out’ when they have accomplished their charge of mentoring and succession planning. Paul’s post is excellent as well….Daniel Pink’s book ‘Drive’ focuses on what motivates and it isn’t money.
Amelia makes some great observations. As important as it is to periodically assess all the risks that could confront an organization, too many organizations see succession planning as simply “putting a name in each box.” I believe the best firms attract and retain top talent by offering them stimulating and challenging work and creating a culture that fosters and rewards teamwork. These organizations celebrate personal growth and development and, although they may lose some great people to better opportunities, they are able to continually recruit new talent because their people know they will have the ability to develop. These organizations are better able to prepare succession plans that will protect the company’s interests.
Spot on, Amelia. In the non-profit sector, where I often dwell, the problem can be compounded by the twin facts of lack of succession planning and a dearth of turnover at the top. Thus, high-quality people at the next levels often have to follow the “move out to move up” principle to advance their careers and find new challenges. This results in a double-loss: once when that future leader moves on, and again when the C-level leader retires–with nobody groomed for succession.
As someone said, “We all have to go eventually.” I agree with Paul: make succession a part of the culture if you want to do truly great things that outlast you.
Very good add, John – also true in smaller and/or family owned businesses.
Excellent points Amelia. In addition to mitigating the impact of an unplanned departure, taking the time to recognize employee potential and focusing efforts on development and cross-functional experience provides added benefits in improved alignment and engagement. The whole organization becomes stronger!
Particularly agree with the need to provide cross-functional experience. In this world of specialization, I think we often miss the value of learning other perspectives.
Great post and timely! I think this is especially problematic for companies with large young, mid-level management staffs. In “Motivating the ‘What’s In It For Me?’ Workforce,” Cam Marston discusses how the younger generation of workers is often more loyal to good leaders than they are to companies. So the loss of good leader may result in a larger exodus of talent.
The best companies I’ve worked with make replacement a part of the culture. It’s difficult to establish, but ultimately being replaceable is good for both the company and the individual. But it’s a trait that must be encouraged at the highest levels to be successful…
A great point about making replacement a part of a company’s culture, and I agree – it has to start at the top. Thanks for posting!