There are multiple examples of failed CEO-succession practices affecting some high profile South African companies at the moment.
There are lessons to be learned from these missteps and here I share a few thoughts on the topic of Leadership Succession to aid that process. Succession is controllable; therefore there are few reasons as to why it can’t be done excellently.
Let’s be clear on what Succession is:
When done well: It is a well-choreographed, transparent, long-runway process that lands the right candidate in the CEO seat in an optimal position to succeed, whilst retaining all competing senior talent along the way.
What is not: A reactionary, late-to-the-game, secret process that one day ends up in a hurried announcement of a resignation and a mad scramble to find a suitable enough candidate.
My view as to why Succession fails is because it is not seen as a process, but rather an idea. So the relationship we have with Succession is an arms’ length one – we know it’s there, we know it’s needed, but we don’t initiate it. Thus it doesn’t receive the rigour that most other corporate processes, like innovation, strategy, cost-reduction, or training, enjoy.
I also believe that there is a lot of fear around Succession. Fear that it will result in the surfacing of some uncomfortable truths, or might necessitate some challenging conversations. Which it will! But that is the point – there are likely to be competing interests for the next CEO appointment and there will be winners and losers.
What doesn’t need to happen, however, is for this discomfort to cause collateral damage.
There is a way of doing Succession that can deliver a result that leaves all personnel and the organisation in general, better off. It stands to reason that we seek this out.
Below are some broad Succession best practices:
- CEO/Board alignment: Succession requires both the board (should one exist) and the CEO to be in a good relationship with one another, the kind of relationship that allows for frank conversations about quality of fit to the current strategy, the growth phase of the business, energy levels, and the quality of talent rising through the ranks and their readiness to lead a business.
- Alert executive HR-related oversight: The fullness of the CEO reality often prevents the CEO from taking control of the Succession process. It can be argued that the CEO isn’t responsible for the Succession process, but the reality is that unless the CEO is integrated into the process, there will not be nearly enough understanding of the nuances of the position. Succession might be enabled at an operational level by an HR executive, but it absolutely has to be driven with energy, vision and discipline by the CEO, should he/she be tasked with solving Succession.
- A CEO of high self-awareness: An effective CEO should be thoughtful enough about their career to provide sound guidance as to the timing of a Succession process – both the start of it and the concluding date of the process. The incumbent CEO’s timeline should be the primary driver of the process.
- High-trust, peer relationships at the C-Suite level: Succession, in most cases, involves considering multiple internal candidates for the eventual CEO appointment. This means that there is competition for the role, which, if left unmanaged, will likely engender mistrust and conflict. The best way around this is to create an ongoing, open conversation that acknowledges upfront that there is ultimately going to be a selection made and that the intention is to preserve all social capital and to retain all candidates within the business. Whilst this might sound polyadic, it provides an opportunity to think creatively about how to create roles or alter career paths for the non-selected candidates.
- A gritty, rigorous process: Succession process should provide valuable insights about all the competing candidates by way of an intense, multi-year process that develops the candidates as much as it ‘reveals’ them. The organisation as a whole should be left significantly better of after a Succession process than before due to the quality of the learning process as well as the trust and close relationships that can be built over the course of the process.
As a CEO, if you are in the position of contemplating retirement or a change in career direction, you will gain a lot by simply stating that you are initiating a Succession process. This alone will start a chain reaction that will force you into plotting how best it’s done.
Hopefully, you have enough time to do it in a calm, deliberate way. But even if you don’t, some time is better than no time and a lot can be accomplished simply by thinking through a process that touches on some of the above-recommended points.