When I was at IBM, Sam Palmisano was CEO. Way back in 2004. Sam succeeded Lou Vincent Gerstner Jr. who retired. Sam shook IBM by his famous book titled “Who Says Elephants Can’t Dance” (Sam Palmisano, 2003). However, what wondered the IBM mindscape was that Virginia Rometty succeeded Sam as IBM’s first women CEO. Sam had retired.

Sounds so normal like a rotating chair behind a revolving door. Is it so?

The expression ‘Chair’ usually brings to the mind the two images – of a simple piece of four-legged furniture and a person who could be the authority amongst a group of people. Perceptually a man, if not in reality. Implies power and authority. It’s this aspect that draws one’s attention to the interplay of power and authority and the never-ending chase to win this race. Though this chase for ‘the chair’ exists across different spheres of life, a very interesting one to consider is the corporate sector.

Things are very structured and organised in the corporate sector in terms of roles, responsibilities, authorities, boundaries, hierarchies, etc. This structuring is also visible in context of the growth path for its employees and shows itself at the senior level in the form of succession planning. Succession planning in simple terms is the process of identifying the right talent and preparing them to take up leadership roles in the future when the vacancy arises by virtue of the existing leaders retiring, moving to newer roles or passing away. In other words, it is the process by which contenders for ‘the chair’ are identified and prepared so that the better one may take up the role in the future. 

The purpose of succession planning is to create a talent pool within the organisation from which the deserving candidate ready for the role can be moved to a leadership role as required while maintaining business continuity. This can be done in two ways – 1) Contingency Succession Planning, wherein an emergency or unforeseen leadership vacancy is aimed to be filled, and 2) Proactive Succession Planning, wherein a long-term approach is taken to fill leadership position vacancies. Another benefit of succession planning is that recruitment cost is minimised with the creation of a sizeable succession pipeline. When Steve Jobs wanted a successor, he started the Apple University. Yes, a university to create a succession planning pipeline at Apple, that gave Tim Cook after Steve Jobs.

If we look at it a little closely, it is easily identifiable that succession planning is a structured process which helps establish an organisation’s identity and facilitates the process of organisational identification within the contenders (Albert & Whetton, 1985). The future incumbents need to understand the organization, what it stands for, create ways of co-relating and identifying with it to be considered as the rightful contenders for whichever chair of office they are currently contending for.

Though seemingly simple, succession planning is a highly evolved and complex process by which the race to ‘the chair’ is facilitated and finally won. However, it is not as simple to achieve as it sounds. There are various challenges encountered along the way. The three most common and crucial challenges include – 

1. Identifying the right candidate – a crucial point to consider here is that while a candidate may be excellent at his/her current role, does s/he have what it takes to perform at the higher levels. Moreover, the selection should agree with everyone.
2. Avoid the bias trap – It is quite natural for the selectors/recruiter to end up being biased in the favour of a familiar candidate despite another one being a more deserving choice for the role under consideration. This is where succession planning can fail terribly and should be avoided. The selection should be made based on the best suited skills as opposed to any other criteria. 
3. Maintain high morale– This is a crucial challenge faced during succession planning as talking about retirement or redundancy can end up being very daunting for some people thereby impacting their morale.  An environment of openness in discussing the growth path and transparency around the possible candidates for growth could help keep the morale high.

It is with such challenges in consideration that one realises the importance of a careful and well-planned succession planning approach. One that steers clear of these challenges and delivers a succession planning strategy that is aligned with the organisational strategy. It is then that in real terms ‘the chair’ will be able to find its rightful heir. 

That’s a bit about how it happens inside the organization. How does it happen at the industry level? Industry level succession planning can be understood from the fact that most CXO of Unilever who cannot make it to the highest executive chair within, becomes CEOs in other companies. Unilever thus is known as the CEO factory that produces well-groomed ready-to-hire CEOs who can hit the road running in any industry.

Think! How does your organization prepare its future leaders? Do you have a plan? The first step is to have a kindergarten of leadership in-house, that builds the first-time managers in their formative years with a success rate of 70 to 80%. As said – If we do not prepare your leaders for future now, you are beginning to make your organization obsolete.

This blog is written by Namita Singh; Consultant & Project Manager at Growthsqapes.

References: 

• Peter Burrows. “Why Apple University Matters More Than Ever”. Bloomberg.com.
• Global Leadership Forecast 2021 by DDI