The fundamental point of CEO and senior-level succession planning is that you have to
work out what objectives you want to achieve through the succession.
Unfortunately, most selection is driven by a focus on the 'who’ rather than the ‘what’. If
the organisation has done well in the past, it is all too easy to say: we want another one of
those, a clone. If the organisation has not been travelling well, then the selection
committee may well react by saying that it wants someone entirely different.
In essence, the board must know, at any point in time, what the next CEO will have to
achieve and who might be potential internal and external candidates.
Succession planning should involve:
Regular assessing, say every six months, the challenges and scenarios facing the organisation at that point and over the next three years.
Determining the skills and attributes of a chief executive, if one had to be selected in the near future, necessary to formulate and implement strategies to deal with those challenges.
The approach of ‘what, not who’ is essential because the CEO is an important component
of organisational performance, but not the only one. Given the known impact of not
addressing cultural issues, the board must have a clear sense of what the existing culture
is and what needs to change if they are to properly exercise their governance
responsibilities.
Research suggests that many boards do not embrace succession planning, let alone take
culture and cultural change skills into account in the selection of a chief executive. In
those organisations, succession planning is not a ‘plan' at all. It is a reactionary event
approached with a 'crisis' mentality. As a result an expedient appointment is made, often
without proper consideration of the opportunities that a change at the top might offer.
My own view is that, even in an unexpected or unplanned-for opening, it is always
preferable to take full advantage of the opportunity. In the absence of a considered
succession strategy, the organisation can use this chance to make sure that the needs of
the business going forward are fully identified before beginning the search for the new
CEO.
This is an edited extract from Anne's chapter, 'When the conductor leaves: Handing on
the cultural baton', which appears in The Power of Culture: Driving Today’s Organisation,
AIM Management Today Series.
The Power of Culture is the fifth title in AlM’s popular Management Today Series. It
explores how to understand, assess, manage and lead organisational culture, and shows
managers how to turn the ‘soft stuff’ of the organisation into a competitive advantage.
Article first published in the Queensland Australian Institute of Management AGENDA July
2004
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