As the saying goes, even the best laid plans of mice and men often go awry – but the importance of succession planning should never be underestimated. The departure of a highly respected Chief Executive can have a significant impact, both internally and externally. The example of ex-CEO of Thomas Cook, Harriet Green serves as a case in point; despite an apparently seamless transition of the CFO into the top spot following her sudden departure from Thomas Cook, shares plummeted in the days following the announcement. Succession can be challenging even when there is a plan in place, but the difficulties when there is none are even greater. Succession planning should, after all, be a given; it isn’t unusual for Chief Executives to seek new challenges or retire every now and then.
If succession planning is a given then, what should it look like and how can it be achieved successfully?
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Build great leadership teams: Succession planning should be a continual process, not a frantic last minute scramble. Building a culture of talent development and progression needs to be at the heart of every organisation at all levels, not just at the top. Giving potential successors or high achievers important projects or extra responsibility can develop their knowledge and test their ability, thereby preparing them for leadership in the future. In fact, the ability to develop others, promote opportunities and offer feedback on performance should be an integral part of the assessment of a new Chief Executive – and indeed anyone in a managerial position. The added bonus is that a strong senior management team can make the transition of a new leader much smoother. Of course that doesn’t mean that the new CEO should always come from the Senior Leadership Team.
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Boards need to make the recruitment of their new Chief Executive a priority: This will take time and energy but is an absolute necessity. Working with numerous organisations in the beyond profit sector, we have witnessed the difficulties of appointing a new leader when the board is unwilling to devote the time and energy necessary to the project But we have also seen how successful an appointment can be when an engaged Chair and board of trustees work together with a clearly defined vision for the organisation and the skills and characteristics essential in the person to lead it. It is the most important job a Chair will ever do. (Please follow this link for a summary of the skills and attributes of chief executives).
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See succession planning as an opportunity and not just a loss: Thankfully the “tap on the shoulder” mentality is decreasing and organisations in the beyond profit space are usually open to making external appointments. This is particularly important given the increased public scrutiny placed on the sector, as well as its own emphasis on transparency – not to mention use of voluntary funds. A leader from outside of the board’s immediate networks can bring a fresh pair of eyes, spur innovation and serve as a catalyst for important, if difficult, change that allows the organisation to have greater impact.
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Outgoing Chief Executives should not be in charge of recruiting their successor: This can easily risk a like-for-like appointment, as well as giving power and say into an organisation’s future to someone who will no longer have a significant stake in it. The absence of the outgoing Chief Executive in decision-making allows the board the freedom and lateral space to think about new avenues they may wish to explore and differences in style, skills or experience that a new leader can bring.
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Unsuccessful internal and external candidates must be treated well: In such a small sector, individuals within the beyond profit space are likely to cross paths in other guises, and a negative experience can damage what could have been a useful and enriching relationship, as well as mar an organisation’s reputation. Unsuccessful internal candidates also need to receive useful feedback and feel that the experience was positive, even if the outcome was disappointing. Boards and the incoming Chief Executive should also be prepared to support their career development, perhaps by modifying their role or by supporting their decision to leave the organisation.
This is by no means an exhaustive or definitive statement on how to ensure good succession procedures. However, by following and implementing good processes, succession planning can become an opportunity for organisations to build stronger teams, promote a culture of talent development, encourage fresh perspectives and ultimately have a greater impact on their beneficiaries.
Prospectus supports a significant number of beyond profit organisations by finding and appointing new leaders. Should you seek advice or wish to discuss the appointment of a new Chief Executive, please do not hesitate to contact the Prospectus Team.
