The Failure of Succession Plans
September 27th, 2023 | Succeed with change
This is a true story.
A 3,000+ company is merging with a 1,500+ people company.
The CHRO of the 3,000+ company has some serious activities on her plate. These activities are under high voltage because operations will continue under the umbrella of the 1,500+ company. You may think such a merger is just the rebranding of the newly merged company. This isn’t the case! One of the first visible consequences is that the headquarters move more than 8,000 kilometers/5,000 miles. People are becoming increasingly anxious about the future of their work. Those who can move into new roles in new companies, do exactly this.
As a result, the CHRO is now facing a situation in which many people in key positions in the formal organization are leaving. So, one of the activities that are keeping her up all night is linked to the execution of succession plans. And this isn’t going well. She mentioned that they are not anymore looking at plan B of the succession plan, but have gone into plan C, D, and beyond in some cases.
When she mentioned this, I was thinking to myself: “you should never talk about plans A, B, C, or D in a succession plan. The succession plan should only have one plan”. Let me explain to you why.
The Succession Plan Should Reflect the Leadership Organization, not the Individual Leader
When talking about plans A, B, C, or D, you have already set yourself up to make decisions based on the current situation. This is a reactive strategy and that isn’t the place you want to be in as HR functions or CHRO when you want to be a strategic partner to the business, not an operational partner.
In the case of this CHRO, plan A was all about retaining Maggy. She was therefore also offered an attractive compensation package. This however still didn’t help to keep Maggy onboard. She had decided for herself it was her time to leave the company. Plan B needed to be executed: “let’s get the second-best candidate then”. The CHRO however hit the wall a second time in a short period. It turned out the second best didn’t see a future in the new organization as well. Plan C was the only plan still standing before the CHRO needed to execute plan D – hiring an expensive headhunter company.
This story shows the importance to work on ONE plan. A plan on which you can make decisions based on where you want to be, not based on the current situation. A plan that is proactive, not reactive.
How to Build a Proactive “Succession” Plan?
First, stop calling the plan a succession plan. Succession is a series of things coming one after another. Thinking like this is the recipe for disaster in a fast-changing and complex environment. And that is what happens when you only look at the individuals.
Second, stop looking at individuals through the lens of the formal hierarchy. Start with understanding how work is done inside the leadership team.
The above visualization shows a real leadership team concerned with Sales. It’s not linked to the story of the CHRO but can certainly be used to illustrate the power of understanding people networks.
Imagine if Maggy was the blue triangle keeping most of the European sales leaders connected with North American sales leaders. Without knowing the insights of this informal network, you would go for insights from the formal network. So, who among of top management – similar to Maggy’s rank – do we need to put forward to keep things together during the merger?
Let me explain how the CHROs challenge connects with this visualization. You know that Maggy is leaving, and need to have plan B
- If you would not have the insights into networks, you would probably go for another European top management leader with great KPIs. Is this the solution? No! Even though the KPIs might be of superb quality, none of the European top management leaders can keep all the other leaders together. Maggy was a broker. But having such a broker brings a big risk: fragmentation. And this fragmentation is killing when you need to align everyone during these transformative times.
- If you would have the insights into networks, you would probably go for the European middle management leader in the middle of the visualization. Is this the solution? No! Doing this still leaves the leadership very vulnerable. The risk of the new middle management leaving and the rest falling apart is still big. And this person was closely connected to Maggy – meaning that they may have influenced each other informally on whether to stay or to go. And this is perhaps exactly what happened to the CHRO.
So, how can you ensure leadership continuity in times of turbulence?
Build Cohesive Leadership Teams
You need to have one plan. This plan is all about building a cohesive leadership team. Which needs to be done before the challenges begin – like leaders leaving. It should be a continuous and integrative assessment.
These cohesive teams are not built around the formal hierarchy or broker as mentioned earlier. The cohesion is found in connecting the silos. In bringing a small group of people together on meaningful and targeted cross-collaborative initiatives.
This is what can be seen in the simulation below. By only connecting three people in this leadership team, the cohesion of the team improved. This has many advantages, such as:
- it limits its vulnerability to falling apart
- it strengthens the sharing of knowledge
- it supports the business strategically and proactively – the sweet spot of every CHRO and HR