Succession planning is all about reducing risk, and CEOs and Boards of Directors hate risk. Most organizations do not have an adequate pipeline of leadership talent and senior managers to ensure consistent operation. For these organizations, succession planning is the most significant business driver for talent management in organizations.
McDonald’s (years ago) had two CEOs die or resign for health reasons within six months of each other in late 2004 and early 2005. Successors were named right away. Poor succession planning has also been linked to companies with revenue shortfalls and substandard performance. With senior leaders getting older, this is a continuing issue. Replacement planning fills immediate gaps. It is, at best, a stop-gap measure designed to fill a position quickly. Replacement planning is reactive, tactical and often of limited value. In some cases, replacement planning is the best option; but in most cases it is not.
Succession management looks beyond the immediate situation to a future horizon and therefore is more forward looking and strategic. Development is also a vital part of succession management as leaders and managers prepare for the future. If management just wants to clone itself, then replacement planning accomplishes this goal. If management wants to adjust to the future, continuously improve and lead the organization in new ways, then succession management is the best process to follow.
Talent pools are increasingly the choice for succession management. A talent pool is when more than one candidate is being groomed for higher level positions. The talent pool provides greater choice and flexibility for the organization. It is increasingly difficult for an organization to groom a single candidate for a single position.
Remember the McDonald’s example. It sets the wrong expectation, unless at the very end of the succession process after different candidates have been vetted. The talent pool construct also argues for more cross-functional skills and experiences. A candidate needs to do whatever he or she can do to be highly qualified for different types of positions. This can include working in different parts of the world as well.
Getting unstuck from the middle not only requires a valid passport, but also knowing if you are in the shallow or deep end of the talent pool.