How to Improve Your Organization’s Succession Planning
Each year, we ask our Vistage members to identify the issues they process most frequently in their groups. And each year, succession planning is among the top topics of conversation. In a recent article in CFO Journal, Mark Buthman talks about how he worked with the leadership team at Kimberly-Clark to select his replacement as CFO for the company. Buthman’s longstanding goal of wanting to retire at 55 was made possible, in part, because they engaged proactively in a process of responsible succession planning. Unfortunately, unless you’re in a Vistage group, where this comes up all the time, or you work for a complex organization like Kimberly-Clark, which takes succession planning seriously, it gets pushed to the back burner far too often.
It’s important, but do you have a plan in place?
In a recent study conducted by The Institute of Executive Development, Stanford University Rock Center for Corporate Governance, and Stanford’s Graduate School of Business, the executives that were interviewed all believe succession planning is important, yet they admitted that their organizations are not doing nearly enough about it.
Key findings from the study include:
- Companies do not know who is next in line to fill senior executive positions.
- Companies do not have an actionable process in place to select senior executives.
- Companies plan for succession to “reduce risk” rather than “to find the best successors.”
- Roles are not defined and often they are not followed.
- Succession plans are not connected with coaching and internal talent development programs.
For more information about the findings and for recommendations on how to improve your organizational succession and talent development program, I invite you to read the 2014 Report on Senior Executive Succession Planning and Talent Development. I will also point you to a terrific Executive Street post written by Marc Emmer, where he outlines an 8-step succession plan you may find very helpful.
Succession planning should not only be about reducing risk; it has to be about finding the best successors. If you do that, your legacy as CEO won’t simply be about what you did while you had the job, it will be what you prepared the company to achieve long after.