BrazilPaul Ballman on the importance of succession planning for boards
A seasoned business psychologist with a specialty in leadership development, Paul Ballman leads the Leadership & Succession practice of Russell Reynolds Associates in the EMEA region. A discussion with Ballman on the importance of succession planning for boards, and how leaders can plan for and streamline the process.
When it comes to C-suite and board roles, how important is succession planning to ensure a smooth transition process, and maintain a positive company culture?
Ensuring a company has an established succession plan is incredibly important. In an ideal world, as soon as a new appointment is made, plans for locating and nurturing a successor should begin almost immediately. Internal candidates are likely to be the first port of call – they know how the machine works and which levers to pull to make it work even better.
Naturally, it’s a lot easier if a company can benefit from the years of experience these individuals bring with them rather than onboarding a fresh, new joiner. Not only that, but nurturing the next generation of inhouse leaders is an essential part of keeping senior and junior members of the workforce engaged and provides them with reassurance that opportunities can come their way and won’t always be given to external candidates.
By planning ahead, rather than waiting for notices to be handed in, internal candidates can be given the opportunity to work in new rotations of the business and take on new responsibilities to enhance their training and round off any gaps they have in their experience – all over a period of years.
Covid-19 has impacted every aspect of society over the last 18 months. How has it impacted senior succession planning?
Businesses have had to face a plethora of new challenges as a result of the pressures brought on by the pandemic. Our recent study revealed that uncertain economic growth (61%), the availability of key talent and skills (59%) and technological change (48%) ranked amongst global executives’ top five concerns for the future.
Looking ahead, new qualities will be sought after in tomorrow’s leaders: agility, wider commercial awareness and flexibility will be just some of the desired traits.
Our future is looking very different from our past: issues surrounding ESG as well as diversity and inclusion require different skills but also different values and personalities than before. This evolution needs to be taken into consideration by current business leaders. We can’t measure the next cohort of leaders against their predecessors, they must be different.
What are the biggest challenges when it comes to planning for a successor?
Perhaps the greatest challenge is making it a dynamic and engaging process. Talented individuals who are ear-marked for succession won’t necessarily sit quietly and wait for their turn to take on the big role – indeed the succession planning process itself may trigger new rotations and opportunities. With this in mind, it is important to consider succession planning a process that will evolve over years, rather than a one-off activity.
What three improvements can boards make that will ensure senior succession plans are well established ahead of time?
When it comes to planning for a successor, curiosity isn’t a bad thing – far from it in fact. Posing questions and looking beyond the facts laid at their door will help boards find the perfect fit. Boards shouldn’t accept a plan which simply provides them with the names of future successors. They must go a step further, delve into what qualities make the candidate suitable for the role and what is being done to make them fully prepared for the step up.
Secondly, incumbent leaders should use this process as an opportunity to make their leadership teams more diverse and inclusive by ensuring the right mix of successors are being nurtured.
Finally, boards need to look beyond CEO and C-Suite roles to other “mission critical roles” that are required to fulfil the company strategy. These can include roles that lead to the introduction of a new, strategically important technology, leaders of existing large P&Ls that need to be kept on course or brand defining thought leaders. Not every key role will necessarily be on the executive team, but succession planning matters for them too.
In the year of COP26, sustainability has become an increasing priority on many business agendas. What attributes are key in a sustainable leader and how do they drive forward the necessary change?
The last 2-3 years has seen a rapid proliferation of net zero targets and sustainability pledges, in part driven by the UN’s Race to Zero Campaign. Making these pledges is not easy, it requires long term planning and an ability to bring an organisation on a journey. Achieving these targets, while also meeting commercial expectations, however, is significantly harder.
The next generation of sustainable leaders need ambition, courage, resilience and natural curiosity. These traits allow them to delve beyond their already deep understanding of the organisation in order to disrupt. Their skills and insights can be leveraged to create strategies that can be activated over long periods and on multiple levels, all while educating and including stakeholders on the journey.
But change doesn’t just happen at the top, to take the biggest steps sustainability needs to be scattered throughout the business. It needs to be a key consideration in the selection and development of employees. It can also be embedded into annual reports and remuneration, linking different aspects of an organisation’s practices to sustainability targets.
Diversity is an ongoing discussion within many organisations. To what extent does talent management and planning feed into improving leadership diversity in business?
Both talent management and succession planning at a senior leadership level is vital to improving diversity across the business, not just at the top. Organisations often feel they need to stick to the status quo when they struggle to find people with exactly the experience and skills that they want.
But, by leaving enough time to plan ahead, businesses can take a deeper dive into developing their talent pool, proactively identifying underrepresented groups with potential in their organisations and, over time, give them the experience they need.
