As generational change sweeps through nearly every industry’s workforce, setting the stage for a CEO succession has become a critical goal for nearly every HR leader.
Following their recent conversation about the importance of board involvement in succession planning, Susan Gallagher, president and CEO of BPI group U.S., a global leadership and talent consultancy, and Diane Frisch, HR consultant and former senior vice president of human resources at Ingredion, continue the discussion with a focus on the skills and coaching needed to fully develop talent in the pipeline.
Susan: More and more of our clients are asking about succession planning. To prepare for the possibility of a sudden CEO departure, what steps should boards take to prepare their next tier – even those who might not get the nod?
Diane: Companies probably don’t do a good enough job preparing people for a potential transition. The lack of preparation puts a tremendous amount of pressure on the heir apparent. For example, if a COO has been under the tutelage of a CEO and the CEO leaves, it’s a whole new ball game. That COO is now managing up to the board in a way they’ve never managed before. The question is how astute has the board been in preparing that COO for the helm?
In today’s market, you must devote the time and energy to develop your people. It’s critical to the success and future of any business. If you don’t do it, you’ll be faced with a constant talent churn, which gets very expensive.
“Companies probably don’t do a good enough job preparing people for a potential transition. The lack of preparation puts a tremendous amount of pressure on the heir apparent.”
There’s a lot to be said about coaching at this level. Very few people at the VP level and above really take the time to reflect on themselves, their teams and the dynamic between them. And yet this is the ideal time to identify not only opportunities, but also possible scenarios that could hurt them.
Q: What kind of leadership training does the board expect of the CEO and others on the executive team?
The importance of competency modeling (aligning your core competencies with your business strategy) cannot be overstated. It’s really at the core of any talent management process because it helps articulate your aspirations for the future state of talent in the company. And, of course, competency modeling works hand in hand with leadership development.
These development programs must be rigorous. I’m not talking about sitting in a classroom and taking notes. Leaders today are obligated to dig in and optimize their teams, work with corporate universities, or engage in experiential learning – all of which can be painstaking, but also contribute to a fully functional team. Most importantly, it prepares the team for change when it inevitably comes.
When issues arise, they need to be addressed head on. Your leaders may have most of the attributes you want them to have, but ironically, their people skills or leadership skills are often lacking. If you put leaders in place who have lousy people skills, you’re going to pay the price.
Finally, companies need to keep these development programs fresh and revisit them every couple of years to keep them sustainable.
Q: The demand for executive coaching is on the rise. Are you seeing any specific trends related to executive coaching that have an impact on succession planning?
Unfortunately, I sometimes see coaching used more for rehabilitation than for development. It’s an important distinction to make – are you developing that leader or fixing them? They’re very different things.
I think it depends on where the organization is on its journey. For some, bad behavior may be considered acceptable; people may have learned to live with it. But when an organization makes a conscious decision and says, “These are the behaviors we’re going to expect,” that’s a very different process than trying to fix someone. If an up-and-coming leader has been in an organization for 20 years and they’re ready to move up – but first you have to fix them, it’s too late. The damage has been done.