The Predicament of Succession Planning

As everyone returns from the summer break, enlightened leaders will have taken the opportunity to test out the resilience of their organisations in their absence and identify high performing team members to groom for succession. (For those who didn’t – check out https://bit.ly/2lE5xRn for our thoughts on why taking a break is so important for leaders and their organisation)

Rested and armed with these insights, leaders can start putting together their succession plans. All they have to do now is prepare the future leaders for their new roles through training, mentoring and coaching, plan a managed handover and voila! It all sounds so simple in theory.

Unfortunately, as so many of our clients testify, the reality is rarely so straightforward. From multinationals to owner managed organisations, succession planning seems to be one of the most difficult problems facing leaders.

Why is succession planning so difficult in practice?
In our experience, the biggest problem seems to be ourselves – human beings are complicated, and these complexities lead to multiple challenges.

Fear
In many organisations, the first hurdle is often the person who needs to be succeeded. The desire to hang on, the fear of what the future holds, the loss of position, power or prestige – all of these lead to a reluctance to let go. The consequences of this are that would-be successors are often frustrated by the length of time it takes to be given greater responsibilities or by continued meddling once their predecessor has supposedly vacated the role. The results of this can be very toxic and at the extreme,  lead to the successor departing. It is often as important to get a coach to help the old guard to move on. For example, moving the senior to a new location often helps…

Opportunity
In a world where talent is so mobile, the second challenge results from potential successors bailing out before they take on the responsibilities for which they are groomed. Having invested so much time and energy in developing this talent, what do you do when they find better opportunities? Few organisations have limitless resources to have backups for their backups!

Politics
Corporate and boardroom politics are another factor to consider. Take the example of the Tata Group in India. The Tata Group had a well-known succession plan for Ratan Tata. Noel Tata had been groomed for the role for years. Unfortunately, as events unfolded and family dynamics kicked in, he was pushed aside and the job given to Cyrus Mistry. As history shows us, this did not end well, and eventually Ratan Tata came back as Cyrus was pushed out.

Cost
Another challenge comes from the financial implications of succession planning. For organisations trying to maximise profits, an investment in building a talent pipeline immediately hits the bottom line. How do you justify having a few extra highly paid senior managers, when the organisation is looking for efficiency gains everywhere else? (Wouldn’t it be nice if you could capitalise these expenses?)
 
For organisations with small teams spread out globally, the problem becomes even more acute. Adding one or two extra people to a large centralised team can be managed. The costs of additional manpower in each location would be prohibitive, nor can you somehow groom management centrally in such an organisation.

Uncertainty
Finally, organisations operate in a dynamic environment. Does the new guard need the same type of skills and experiences as the old guard? What happens if a recession hits in the middle of an expansion? Suddenly, the type of leadership required is different – have the leaders in waiting been adequately equipped to deal with the new realities?

So, if you are facing a challenge with succession planning, don’t be too hard on yourself. Chances are, everyone around you is going through similar pains!

Keywords: high performing team members | second challenge results | succession planning | difficult problems facing | many organisations