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 Smallbiz Articles » General Small Business » Exit Topics » The Role of the CEO in Succession Planning |
By Deedee Myers You are the CEO of a well-managed credit union and you have just left a board meeting where you submitted your resignation. You start another job in 30 days and plan on relaxing and renewing with your family on the slopes around Tahoe, catching up on the latest novels, sleeping in and just hanging out. The board is surprised at the announcement of your sudden departure and prefers that you stay on and lead the credit union. However, they are comfortable that the transition will be smooth because a strategic initiative, for the past four years, has been to continually and systematically build an internal talent pool. Five years ago you and your board agreed to assess the organizational talent to ensure that it meets with the aggressive future strategic direction of the organization. In a nutshell, you started Succession Planning. Your credit union was in a marketplace that called for innovative products and services delivered through multiple delivery channels. If you did not grab the market, it was ripe for other financial institutions, both traditional and nontraditional. Some bold moves needed to be taken with your leadership team. A couple managers moved on to other organizations; you restructured roles and responsibilities; and created a mindset aware of the need for excellent talent. You moved beyond 'Quality' to 'Excellence.' This article addresses actions of a CEO who is passionate about people development to ensure that through planned, or unforeseen changes in personnel in critical positions, the members of the credit union are served. This is called Succession Planning. It should happen throughout the entire organization and at all levels. The starting place is at the CEO level. Developing competencies for the CEO position is the first step in a structured and systematic Succession Planning process. Succession Planning ensures that the right people are in the right places at the right times. There are three aims of Succession Planning:
If you start today, planning for Successors in the right way with the right people, in two years you will have created a talent mindset that will be integral to your culture. Start with your position, the CEO job, and systematically web Succession Planning throughout the credit union. First Start with a Replacement Plan that can be invoked in the case of your unplanned departure from the credit union. Provide a step by step checklist for your Chair to aid her in effective a smooth transition as best possible. (See more on this is a related article). Second Develop a structured Succession Plan for direct reports to your position. Understand who are the potential successors, their strengths and weaknesses, how to support their continual growth and their interest level in being selected as the next CEO. More discussion on how to make this happen will follow. Third Create a Replacement Plan for direct reports to you. If one or more of your executive team unexpectedly departs or has a sudden demise, know where and who to go for to continue to fulfill daily responsibilities. This may mean requesting that two or more individuals temporarily accept additional responsibilities. Document your plan and provide a copy to Human Resources Executive. Be aware of 'job block.' If a manager is too important in her position, and cannot be promoted, her direct reports are job blocked. Develop and train people assuming that everyone will be able to leave their current job within the next two years. This creates an attractive pool of talent that is fluid, flexible and dynamic. Fourth Start a Succession Plan for your middle level managers. Include people development as part of every performance review for every manager and supervisor. Fifth Create Succession Plans for all organizational key or critical positions. Assess your organization and target every critical position. A critical position is one that materially impacts the purpose of your credit union. Sixth Update your Succession Plans as part of your strategic planning process. Do you have the right people in the right places to live your strategic plan? Create a Culture that is Attractive to Talent Your ability to attract, develop and retain talent will be a major competitive advantage far into the future. Talent is attracted to talent. All managers, starting with the CEO, are responsible for strengthening their talent pool. Shape your organization, your jobs, even your strategy to appeal to talented people. Treat recruiting like marketing, not like purchasing. Fuel development primarily through stretch jobs, coaching and mentoring and affirm all of your people, but invest differentially in your A, B and C players. Open or Closed Process: Treat with Candor or Secrecy Should your Succession Plan be opened or closed and what are the issues related to each scenario. With an open process, the plan is treated with candor and the work requirements, competencies and conditions of success are openly communicated. A closed process is held close to the vest and there is no input from those impacted by the process. Potential Successors participate in their own assessment and development plan in an open environment. They are aware of their weaknesses and receive appropriate coaching and mentoring and routinely receive feedback and course correction. Potential Successors receive stretch assignments, increased responsibilities and special projects to enhance their potential selection for the CEO job. In a closed environment, there is a loyalty issue especially if an outsider is the unexpected choice. The risk of turnover is higher because employees perceive that they were overlooked for development and, consequently, look elsewhere for where they can add value to another employer. Coaching the CEO of Today and Tomorrow A professional needs a coach. An amateur does not. Consider the possibility of a coach who has been trained to 'lead from behind' the leaders of today and tomorrow. Potential Successors will know themselves better and how to strategically use their strengths and weaknesses if they work with a trained coach. It is impossible to lead others if you cannot lead yourself. Coaches are trained to work with clients who want to move forward in a different way but are not sure how or what to do. This is all part of Succession Planning - growing ourselves so we can be what we want to be in the future. Building Blocks Essential building blocks to creating a robust succession plan include; Developing competencies:
Getting Started Like with any strategic plan it is best to know what the desired outcome is; understand your starting point and create a plan to link the present with the future. Use surveys, questionnaires, behavior profiles and other assessment tools to understand what competencies are intrinsic to your organization from the viewpoint of several participants. Understand what talent, potential talent and hidden talent can be tapped or uncovered. Consider using an external facilitator to guide the assessment process. They are trained to ask the right questions and to assess the systems and processes. Summary Succession Planning is having the right people in the right place at the right time. Start with the end goal. Assess the current talent and structure roles and responsibilities so that competency development is emphasized for your strategic plan of the future. Decide if you want a closed or open succession planning process and the merits of each. Use a coach to lead you from behind and to help see possibilities for creating a talent mindset. Decide if you want quality or excellence for there is a difference. Copyright DDJ Myers, Ltd. 2007 Deedee Myers is a certified executive and leadership coach with 16 years expertise in recruiting and competency development for financial firms. She founded DDJ Myers, Ltd. and the Advancing Leadership Institute to work with boards, executives, managers and supervisors to develop leadership cultures. |
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