Economic Recovery and Retirement Await Many
Retirement plans are being postponed for many, but the reality remains that many of our baby boomer leaders are well into the back half of their careers and succession planning is as much a factor for firms' future success as how, when, and to what extent the economy recovers.
Our own internal survey suggests that about half of the healthcare A/E/C top spots are occupied by individuals who will most likely retire within a two-to-seven-year time frame. Yet many, if not most, do not have a succession plan in place. More troubling is their bench is occupied by either others at a similar career stage or by individuals at least 10 years away from taking a lead role. What to do?
Build the bench
The earlier you start to focus on building the bench, the better. Make an honest assessment as to who can ascend to the top spot and who cannot; look outside the organization if necessary. The deeper the bench, the greater the chance of successful succession. Moreover, bench strength impacts succession while those on the succession bench are those who typically have the greatest positive impact on the organization now.
Continually develop your talent
Talent development needs to be a priority and involves more than sending leaders to training classes. Talent development needs to be ongoing and entwined in the culture of the organization. Just a few common but often neglected practices are: 1) Open a dialogue about what leaders need to develop in order to get to the next level; 2) Expose talent to opportunities that will develop their skills; and 3) Be make honest, candid, specific, and timely assessments.
Focus on the process, not the successor
Companies that are good at succession planning focus on the process, not on a person. They recognize that things change and that a person who may appear to be a good successor now may not turn out to be the right fit in two years when the position needs to be filled. They focus on building a deep and strong bench, developing those that are on that bench, so when a successor needs to be placed they are in a position of strength and not scrambling to hire or promote the best available candidate.