Succeeding at Leadership Transitions
After two years, nearly half of all senior leadership transitions are regarded as failures or disappointments. Executive transitions, whether at the Director, Vice-President, or C-level, create uncertainty and are typically high-stakes, high-tension events. When asked to rank life’s challenges in order of difficulty, the top one is “making a transition at work” – ahead of bereavement, divorce, and health issues according to a study by DDI.1 As many as 74 percent of US leaders and 83 percent of global ones think they are unprepared for their new roles. Organizations most often try to help newly appointed leaders by supplying them with mentors or informal buddy networks. Yet, only 47 percent of external hires and 29 percent of internal ones find these helpful. Standard orientation programs are the second most common approach. However, only 19 percent of externally and 11 percent of internally recruited executives consider them effective. Customized assimilation plans and tailored executive coaching have been shown to double the likelihood of success, yet only 32 percent of organizations use them. What’s more, 98% of leaders believe a succession plan is important, however, according to a recent survey by a global organizational consulting firm, only 35% have a plan in place.2
What is Succession Planning?
Succession planning is the process of identifying and developing the people and plans to successfully transition a role from one leader to the next. It typically involves identifying key roles for succession planning, defining what it takes to successfully execute in the role, assessing people against these criteria, identifying who could potentially perform highly in the role, and then developing those identified to be ready to execute in the role. It’s not just about the people that are already at your company. According to a recent Stanford University study, 61% of companies believe that they have no viable internal candidate for their most senior leader and leadership transitions impact organization’s entire ecosystems.3
Succession planning is not just for the CEO either. It’s important for all your leadership roles. Selecting your leaders is one of the most important business decisions you’ll ever make. And, leadership transitions are not a question of if, but when. Everyone eventually leaves their role; everyone.
To Prepare is Half the Battle
Leadership transitions are high-stakes, high-tension events. In our work with hundreds of companies the following seven practices rise to the top when it comes to successful leadership transitions:
- Define how your leadership roles fit into your overall business strategy. This step ensures that the investment in future leaders reflects the organization’s strategic direction. As Marshall Goldsmith said, “What got you here, won’t get you there.” 4 Companies can tend to think of their leadership roles as static. Nowhere is this more problematic than in technology related leadership roles where more than 50% of hires in the coming years are expected to be for roles that never existed before. It’s important to understand how a company’s strategy will impact the roles of its leaders. Align your vision for your leadership roles with your business strategy and vision. Then, thoughtfully define the competencies, values, and basic natural behaviors and work styles that fit this vision and are required to take your leadership roles to the next step in their evolutionary and, sometimes revolutionary journey.
- Include all key stakeholders. Succession planning and the development of associated transition plans should be a continuous process that involves the key stakeholders within your organization as well as key external stakeholders that can provide leaders with important external perspectives. If your organization has key partners in the field of talent and organizational development or strategy formulation and execution, include them. If your company has customer, alliance, vendor and/or other partner advisory boards, include them for leadership roles that interface with them. Make sure these external relationships are relevant to the leadership role you’re including them in on and see them as your ally in the process. Involve trusted advisors from inside and outside the company.
- Identify and evaluate the fit of potential successors – 40% of all new leaders fail within the first 18 months, mostly due to poor fit. Poor fit is 100% preventable. High performance in one role does not equate to high performance in another. Consider the classic example of the high-performing salesperson who flops as a sales manager. Why does this happen? One reason is the fit of the basic natural self (the way one behaves without any outside pressure for adjustment) with the basic natural behaviors and work styles required to manifest excellence in the new role. The basic natural self is very difficult to change. By the time people reach the age of assuming leadership roles in organizations, they have been practicing being who they are for many years and most of what drives their behaviors is unconscious to them. High performance comes easiest when people are just being who they are naturally, without any outside pressure for adjustment, and find that, who they are naturally is just what the role demands. Remember too, what got you here won’t get you there. The basic natural self of the leader that got you to where you are is not always the basic natural self of the leader needed in the next iteration of the role. As such, develop a model of the basic natural self required for success in the next iteration of the role (not the current iteration) and evaluate the fit of potential successors’ basic natural self against it.
- Create a stewardship mentality. Planning for and executing the smooth transition of senior leadership positions is key to the sustainability of any organization. Even if you don’t think you’ll need to replace a leader in the near future, establishing a culture of mentoring leaders with transition planning skills is foundational to good stewardship. Good leaders understand it is critical to pass on what has been entrusted to them. Yet, many companies lack a formal succession planning process which is only exacerbated by their current leaders living longer or not entrusting more responsibility and authority to their team. Succession planning and the development and maintenance of associated leadership transition plans should not be delegated to HR. Every leader eventually leaves their post. Help leaders see themselves as stewards of their role and have them own their succession plan, including the development and maintenance of its associated transition plan. Include it in their job description and performance evaluation and even consider linking it to their compensation. Then, utilize HR professionals who have first-hand experience helping leaders successfully navigate transitions and who have successfully navigated leadership transitions themselves to aide your leaders in the development and maintenance of their transition plans for the role they are stewarding.
- Engage successors in real-world experiences. Acquiring philosophical knowledge about the duties and responsibilities of a new role and the competencies required to successfully execute those duties and responsibilities is a precursor to being able to execute them well. However, experiences are required to habituate that knowledge. The best transition plans include real-world experiences, where successors are given the responsibility and authority to execute in the real-world situations they will face in their future role. It’s estimated that 95% of brain activity is beyond our conscious awareness. Numerous cognitive neuroscientists have conducted studies that show that only 5% of our cognitive activities (decisions, emotions, actions, and behaviors) are conscious. Through real-world experiences, successors literally wire the neural pathways that form the unconscious habits required to succeed in their future role in advance of taking on the role.
- Plan the power hand-off. The power hand-off is the part of the transition plan that specifies how and when the responsibility and authority for executing the duties and responsibilities of the role will be transitioned. If an overlap is planned, it’s important to make sure who has responsibility and authority until when is clear and not given and then taken away nor, once given, undermined. Many veterans of leadership transitions believe that it’s best for an exiting leader to make a clean break from the organization and not linger. A clear and orderly hand-off of responsibility and authority is key in order to not undermine the new leader and their ability to execute.
- Develop an internal and external communication plan. Communication impacts peoples’ reactions and, because of this, it can determine the outcome of change. The most effective practice in organizational change management is effective communication plans. In second place is effective execution of the communication plan. A great communication plan answers the following three questions… Why is this change happening? What is the risk of not changing? What’s in it for me? The best transition plans include communication plans that answer these three key questions and also provide a two-way street for communication with multiple channels to receive feedback through and structured ways to respond to that feedback.
To be prepared is half the battle when it comes to succeeding at the high-stakes, high-tension event known as a leadership transition. iHs combines intimate knowledge of industry and technology trends with expertise in behavioral assessment and human development as well as technology leadership executive search with their Partners’ peer level experiences in roles such as: CEO, CIO, Managing Director, Partner-in-Charge, President, and Sr. Vice President at high-growth businesses, leading professional services firms and industry titans to help technology leaders prepare for the high-stakes, high-tension event known as a leadership transition. Consider the following quote:
“The process that iHs took us through is what I would consider to be the Gold Standard.” – Board Director and CEO of a Fortune 500 CPG company
To learn more or to start a conversation, give us a call at (847) 447-7700.