succession planning for leadership
TRANSCRIPT
SUCCESSION PLANNING
FOR LEADERSHIP –
Mubarka Buttwww.hireprofile.ca
A Critical Priority
Effective Boards. Affective Leadership.
The Ag end a
1. The Benefits
2. Why Succession Planning Fails
3. Whose Job Is It
4. When is the Right Time
5. Five Steps for CEO Succession
6. Board Succession
7. Best Practices
The Benefits
• Serves as leadership insurance policy
• Creates a talent pipeline
• Creates structure for training and development
• Developing new prospects future proofs your
organization
• Forces the Board to consider a long range strategy for
organizational growth and direction (5 to 10 years)
Why Succession Planning Fails• Lack of attention to succession
• Poor leadership development
• Suboptimal board composition
• Lazy hiring practices
• Conflicted search firms
Whose Job Is It
• More often, the HR and Compensation Committee
leads the process
• Sometimes Governance Committee
• Sometimes Ad-Hoc Committee
• MUST involve CEO
When is the Right Time• This process should start the moment a new
CEO is appointed.
• Casual succession planning or “Hit by Bus”
plan is not enough.
• Delegating succession planning completely
to CEO is surrendering from Board’s duties.
• Make Talent development of the executive
team a measure of success in CEO
Evaluation.
Outline Future CEO Profile
and Align to Busines Strategy
Purposefully Identify and
Develop Rising Stars
Get to know the Bench and its
Potential
Make CEO Succession a
Standing Item for Review
Ensure that your Talent
Pipeline is Linked to your
Busines Strategy
F iv e S tep s for CEO S uccession
01
02
03
04
05
Outline Future CEO Profile and
Align to Busines Strategy 01
• Engage the board in a strategic alignment process.
• Define short and long-term business priorities.
• Link strategic priorities to the experiences, competencies and personal traits required in the next CEO.
• Define competencies required for the future.
• Create a CEO Success Profile Matrix to evaluate internal and external CEO candidates.
Vision
and
Strategy
Ensuring
Tactical
Success
Relationships and
Communication
Motivation Business Fit to
Situation
Personal
Average
Wall, Tracy 3 4 3 2 3 2 2.8
Rau, Shane 3 4 1 2 3 2 2.5
Surrey, Matt 5 5 5 4 5 4 4.7
Scot, John 4 5 3 3 4 5 4.0
Dahl, Bill 4 4 4 4 3 2 3.5
Zimm, Jenn 3 2 3 4 4 3 3.2
Hope, Shae 4 3 3 2 5 2 3.2
Khan, Shilpa 5 4 2 2 5 3 3.5
Smart, Trevor 3 4 2 3 4 2 3.0
Reed, Cheri 3 2 4 4 3 3 3.2
Bird, Ian 3.7 3.7 3.0 3.0 3.9 2.8 3.4
SAMPLE – CEO SUCCESS PROFILE MATRIX
Purposefully Identify and
Develop Rising Stars02
• Find rising managers who have the
right level of all required competencies
and capabilities OR the potential to
develop them.
• Look for critical leadership traits that
are strong indicators of potential. Such
as curiosity, insight, engagement, and
determination.
• Pay attention to emotional intelligence
which is demonstrated through
flexibility, adaptability, self-control, and
relationship management.
• Insist that they be given challenging
rotations, stretch assignments, and
acting appointments.
Get to Know the Bench and its Potential
• Keeping the future strategy in mind, consider who is ready to meet the future challenges.
• Judge everyone against your CEO Success Profile Matrix and review this Matrix annually with the CEO to keep it updated.
• Use 360 reviews of CEO to identify gaps in his/her skills and traits and compare against 360 reviews of Management team to see who can fill those gaps.
• Increase exposure to the Board so directors can continue to assess their potential as possible future leaders.
03
• CEO succession is an “evergreen” process.
• Tie in this review into the Annual Committee Calendar so it’s never missed.
• Having an outlined step by step process helps keep new Board members on track with this process.
Make CEO Succession a
Standing Item for Review
04
Ensure your Talent Pipeline is
Linked to Your Strategy
05
• Many organizations now link
strategy sessions and talent
development sessions
• Keeping the CEO Success Profile
Matrix up to speed every year
gives the Board a huge advantage
• Partner with Search Consultants.
• Give successor candidates room to grow.
• Get CEO thinking about legacy building.
• Think 2 to 3 CEO moves ahead.
• Cross train a generation of CEOs through concerted coaching, education and mentoring.
Best Practices
How many rising stars like Nadella do you have at your organization?
BREAKOUT GROUPS
• Does your organization have a Succession Plan for
your CEO?
• What are some of the CEO Competencies that are
important to your organization?
• 10 years from now, what new traits or competencies will
the future CEO need to help the organization be
successful?
• Also referred to as Board Refreshment or Board
Renewal
• Strategic document that outlines the process for
replacing/recruiting board members
• Helps boards plan for both emergency departures,
planned departures and term limits.
• Minimizes the negative impacts caused by the
skills/competencies gaps resulting from departure of
key board members.
• Increase representation of currently underrepresented
groups.
What is Board
Succession
Planning?
The Importance of Succession
Planning for your Board
• It is a core part of the organization’s growth
strategy and generally falls under the board’s
fiduciary “duty of care”.
• Ensures long-term sustainability of the
organization via effective leadership.
• Builds stakeholder confidence in the
organization.
Steps for Developing a
Board Succession Plan
Get Board Buy-in
Develop and Integrate the Plan
Conduct Skills/Gap Analysis – Act on the Gaps
Build a Talent Pipeline
Establish an Onboarding Process05
01
02
03
04
01 Get Board Buy-in
• Align the Board’s vision for itself and its leadership.
• Handle pushback from any Directors by giving ownership and
responsibility to define competencies.
• Governance/Nomination Committee oversees this process but ad hoc
committee can be formed.
• Engage the CEO and any other necessary stakeholders.
• Collaborate. Collaborate. Collaborate.
02 Develop and Integrate the Plan
• Committee should develop criteria for recommendations to Board
on the following:
a) Board Refreshment i.e. tenure, experience, diversity and
performance
b) Develop Skills/Competency Matrix
c) Candidate profiles for critical positions. i.e. chair, vice chair, A&F
committee chair
d) Process for leading the search for candidates
• Review the plan periodically, build it into your Board Calendar.
• Reiterate to all Directors, that thinking about Board Refreshment is
a fundamental part of their job.
• Regular conversations keep this front of mind and create a culture
of succession.
Conduct Skills/Gap Analysis03
• Define functional competencies and behavioural attributes in the
Skills/Competency Matrix
• Gap Analysis is the foundation of a good succession planning process.
Measures the gap between desired competencies and current state.
• Director self-assessments are common, peer review can also be
completed.
SAMPLE – Skills/Competency Matrix
SAMPLE – Skills/Competency Matrix
SAMPLE – Skills/Competency Matrix
Build a Talent Pipeline04
• Governance Committee should build an Internal Talent Pipeline and an
External Talent Pipeline.
• Based on the skills gaps, start developing existing board members for 3 to
5 years down the line.
• Develop an Evergreen List of external qualified candidates that would both
align with the vision of the organization and could feasibly join the board
right now.
Establish an Onboarding Process05
• To ensure success, have an excellent onboarding process in
place for new Directors.
• A successful Onboarding process is intended to strengthen the
Board member’s connection with the organization and his or her
other fellow Board members.
• Develop an Onboarding Framework to help you stay on top of key
steps.
• Educate and Train!
BREAK OUT GROUPS
• Does your organization strategically plan for Board
refreshment and renewal?
• Do you feel your Board has the necessary skills and
competencies to lead the organization and fulfil their
fiduciary responsibility?
