Succession Planning: Avoiding the Fatal Flaws

A few years back, while working in an enterprise tech company and being tasked to design a Succession Planning process, one of my peers laughed and said to me: “Succession Planning is a big waste of time here. In the end of our CEO’s “Succession Planning” he picks who he wants.” 

While she wasn’t wrong, she was also missing the fatal flaws in that approach: how can one person truly know all there is to know about his/her team and who to place their bets on? 

Many of my clients who sit in CEO and/or Founder roles are perpetual optimists when it comes to their people, even when it’s clear that performance needs to be different. I often ask: “Is this person helping you to be a better CEO, COO, C-whatever?” If the answer is “no,” then you need to start thinking about Succession as a business-critical process.  

The Case for Succession Planning: Why a CEO or Founder of a Start Up or Scale Up Should Care 

Succession Planning done well, in any company of any size, should help an organization achieve the following outcomes: 

• Mitigate risk for the organization, especially where delivery is built around people and not around roles–a pattern that leads to drag, inefficiency, and missed opportunity.
• Enable the leadership team to prepare the path for possibilities for others, increasing engagement and sending important cultural signals.
• Create a culture of possibilities for your best people. What would we ordinarily not consider because of the pace of the business that is there staring us in the face?
• Widen the leadership team’s ability to consider, spot, and capitalize on people. 
• Provide a reality check when the capabilities to lead the company forward are just not there, and then act on that.  

Having worked at several enterprise organizations and now working with founders and CEOs, I can see the same gap, however big or small the company. 

In large enterprises, initiatives spearheaded by large consulting organizations like McKinsey and Bain often collapse under their own weight. Once the energy and fun of identifying critical roles and then the people happens, and then adding them to succession plans or pools is done, the rubber hits the road. The plan is there to be executed, and yet many leaders will lean back into old habits of who is least risk, most loyal, and ‘the least threat to me.’ While it’s human, it’s not helpful; and it certainly is not effective. 

Equally, in smaller companies, where the relationships are closer, hope springs eternal and leaders continue to kick the can down the road on making the hard trade-offs even when they know every day is a missed opportunity without making the change. 

Unless you execute on the process, then the process is a big old waste of time and effort. It’s just busy work. 

Here’s how to make Succession Planning efforts valuable: 

• As a leader, your role is to distinguish the person from the role. Too often we expand roles to fit people and wait too long with a person in a role who is not right, because it’s easier to endure.
• Ask yourself: Does the structure of my organisation best meet the current and future needs of my business? This is equally valuable, whether small or large. If you are in a smaller organization, you have the opportunity to be more agile, so get into that habit now before inertia kicks in.
• Skills! In addition to the most critical roles, what are the critical skills you will need to sustain and grow your business? Too many C-suite leaders devolve this to HR when it’s actually something leadership teams need to talk about, know, agree upon, and revisit regularly.
• Take calculated risks. Listen to your team. Who do you see that demonstrates they could do another role?