What makes or breaks an organisation? For many, it comes down to leadership, but securing strong leadership relies on having the right people in place to take the reins of power over time.
Succession planning is notoriously tricky, as faulty implementation can spell disaster, but when done right, it fuels continuity and growth. But what does "right" entail, exactly?
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While replacing executives and other top leaders is a critical part of succession planning, it is also important for organisations to consider succession strategies for other leadership roles. Here are a few reasons why:
So while C-suite succession is understandably important, effective succession strategies should be implemented more broadly to cover all levels that directly or indirectly impact business operations, culture, and performance. A holistic approach yields the greatest organisational benefits.
While many organisations understand the critical role of succession planning, they often fail to implement effective strategies.
Studies conducted by the Corporate Executive Board (CEB) estimate that a significant percentage, ranging from 50% to 70%, of executives fail within the first 18 months of assuming a new role, irrespective of whether they were recruited externally or internally promoted.
This leads to significant flaws in identifying and developing high-potential individuals to drive both teams and businesses to greater success.
What are these flaws? And why do they occur in the first place?
Many organisations rely on subjective, unstructured assessments, limited data, or even intuition when identifying potential future leaders, leading to the selection of individuals who may not possess the necessary skills or traits for leadership positions.
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When managers are asked to name those they see as high performers or leadership material, it is easy for unconscious preferences to influence their choices. Personal relationships, gender, ethnicity, educational background, and other factors may come into play during the rigorous evaluation of skills and competencies.
Additionally, subjective, unstructured, or limited assessments paint an incomplete picture of an individual's qualifications and readiness. Relying mainly on performance reviews, feedback from a few colleagues, and short conversations provides only a surface-level view of traits that signal leadership potential.
It fails to uncover deeper abilities, preferences, and how candidates might handle future responsibilities that differentiate true leadership material from high performers. Complex jobs like senior management require considering a wide range of criteria.
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Businesses often focus solely on identifying potential future leaders and overlook the developing and nurturing process to help ease these individuals during their transition. About 85% of organisations will have a significant leadership shortfall within five years.
Even worse, poor succession planning practices foster a culture where employees do not see clear paths to advancement. Not having defined processes for advancement and development through the ranks promotes an atmosphere where staff feel more transient rather than invested in their long-term careers.
This ultimately leads to higher turnover as top performers gravitate towards more opportunity-rich workplaces over time.
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