Organisation : Succession Planning. How to decide who should be king

 

Ms Dani Novick is Managing Director of Mercury Search and Selection, www.mercurysearch.co.uk .  Mercury partner The BPIF with www.jobsinprint.com and The Institute of Packaging with www.packagingfutures.com.

 


Succession planning for the top role is notoriously difficult.  Grooming individuals from within takes time and if the top slot is not available when they feel they are ready for it they may be inclined to leave the organisation.  Similarly if there are several contenders you may loose the unsuccessful candidates when one is appointed to the top; a factor that Jack Welch knew well when he was head of GE and planned alternative roles for the others.

So what about bringing in outside talent?  Of course there are advantages and disadvantages.  Clearly internal candidates should have much better and more in depth knowledge of the company and its markets, however the introduction of new blood can be desirable if the board feel that a different approach is needed to re-invigorate the company or if there simply isn’t the right talent internally.

Overall the profile needed for the top job has to be balanced.  Broadly the industry chief exec’s come from manufacturing or finance backgrounds, particularly in publicly quoted companies.  In most cases however you will see that these individuals have experience or sound knowledge of all aspects of the business including manufacturing / operations, sales and finance.  They will have experience of operating at a high level developing and implementing strategy rather than just tactical day to day management.  Business planning ability is crucial; this should be based on a thorough understanding of market and technological trends and be backed with detailed (and realistic) financial plans / forecasts.

What do we look for in recruiting a chief exec?

There are two key areas to consider; firstly technical ability and then personal attributes often referred to emotional intelligence or EQ as opposed to IQ.

Clearly when considering technical ability we are looking for the raw skills and experience covering the various disciplines.  With EQ we are looking for strength of character, the ability to work under what can be extreme pressure, rational analytical thinking and image / interpersonal skills.

The top job means the buck stops here and can be pressured and lonely particularly when things aren’t going right.  Having come up with a strategy it takes great strength of character to carry on doing what you know is right when results aren't coming as fast as you’d like and you are facing criticism. 

Chief exec’s of Plc’s  and Venture Capital backed companies need to understand the way investors think and be able to present to them convincingly; to be able to convey complex market and organisational issues in a digestible manner to justify strategy.  This is crucial to get investors to buy into the strategy as the right course for the business and obviously the right way to spend their money!   Conversely there is also the need to communicate the needs of investors to staff in a way which makes operational sense.

Diplomacy is also needed in balancing the rival priorities of the different areas of the business.  With the best will in the world and the most cohesive team there will be time when there is a conflict between departments, perhaps sales and manufacturing.  In these situations a chief exec must choose the best option for the business whilst keeping all on side.

Communication and the ability to inspire and motivate are also a priority.  Holding the respect of staff and inspiring them to go the extra mile for the collective good is vital in any leader.

What about a practical approach?

We would perhaps start with a simple checklist and consider whether the candidate is weak, has a basic standard, is competent or particularly strong in the following areas:

Qualifications:

  • First degree (preferably technical)
  • Professional qualification
  • Business Qualification

Background / Experience:

  • Manufacturing experience
  • Commercial (sales) experience
  • Other functional experience
  • Management of multiple groups or units
  • Profit accountability
  • Delivered significant change
  • Evidence of personal development

Skills / Knowledge:

  • Strategic Planning
  • Leadership / people management
  • Financial management
  • Project management
  • Knowledge of market dymanics and trends
  • Communication / interpersonal skills
  • Commercial acumen
  • Negotiating skills
  • Presentation skills
  • Foreign language

Behaviours / Character:

  • Strategic thinking
  • Results focus
  • Rational / analytical thinking
  • Influencing skills
  • Attention to detail without micro managing
  • Coaching / developing skills

What happens if the Golden individual with all of these skills doesn’t exist?

For internal candidates the checklist is a useful tool to consider potential candidates.  It will highlight areas or weakness and can be used to create plans to develop those individuals.  Usually a combination of formal training / qualification and experience will be required to develop the rounded individual. 

Formal training take many forms but often the interaction with other mangers at a similar level is very positive in seeing different perspective and different approaches to certain issues.

Experience can be gained through planned career progression or secondments encompassing the various disciplines and roles required. 

Coaching and or mentoring can be used to maximise learning opportunities.  Often situations arise and individuals immediately respond to them without taking a step back to consider them.  The benefit of experience is in seeing that there are alternative.  Coaching or mentoring these individuals can provide the discipline to ensure they learn from them by considering alternatives and seeking advice.

Where they are a weakness developing interpersonal and communication skills is more difficult and tools such as 360 degree feedback can be used to highlight to individuals how they, often unwittingly, come across.

When considering external candidates again the checklist provides a useful starting point.  Again it may be that the perfect individual doesn’t exist and there are two ways of approaching the problem.  If the time and resource is available hiring the most complete candidate in an assistant or designate role and then developing their range and skills as an internal candidate also allows them to learn the business. 

Where time is short assessing the best candidate against the role will highlight areas of weakness.  Consideration can then be given to ensuring there is sufficient support or delegating detailed control of the area may be the best way forward; allowing the individual time to improve their all round ability.

Back to the point – How to choose who will be king

Succession planning for the top job takes time and as I have said previously it shouldn’t just be considered from the perspective of replacing a retiree; it is much more common to have to replace someone leaving.

Step 1 is to consider whether there are suitable internal candidates or if the company needs new blood.

Step 2 is to assess the candidates to see if they have the requisite technical skills and character traits.

Step 3 in the likely event that there isn’t a perfect candidate waiting in the wings is to create a plan to develop the people available by considering their weaknesses and providing training and experience opportunities to develop them.

Step 4 importantly is to continue to challenge these individuals with interesting work until the top job becomes available.

If you end up with a choice of successors then like any business decision a decision must be based on supporting the overall strategic direction of the company.  That is to say pick the individual who has the best abilities to delivery the long term goals of the company.


Ó Copyright Dani Novick, 2005

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