The following article originally appeared in the June newsletter to clients of Kiley Advisors, LLC. Reprinted with permission.
Last month, we introduced the subject of succession planning, a topic that will take several articles to cover. Key points are that succession planning is the hallmark of companies that move to the more respected status of becoming organizations, with foundations that last generations. In its most comprehensive form, it has three components: Succession Planning (identifying the people), a Business Continuity Plan (bonding and insurance considerations), and Ownership Transfer (sale of stock). The primary focus of these articles will be the people side, because it is a key part of any leader’s portfolio to create the future leaders for their organization, their division or their individual role.
There are two critical first steps in the “people” side of succession planning. Both involve the CEO and his senior executive team to optimize these activities. The first is a comprehensive talent inventory, by division or function. It starts with basic facts – age, time with the company, experience, education and training, current compensation – which HR will have on record. But, it is so much more than that. The best situations that we have participated or studied involve what legendary GE leader, Jack Welch, called a “deep dive.” Senior leaders take a significant amount a time as a group to make assessments and decisions about their talent, particularly their “high potentials” and their more immediate successors. Some type of displayed thinking, a board with cards, even a PowerPoint, enhances this process. The individual perspectives of each senior executive about these key people helps develop a comprehensive picture of the experiences, education or exposures needed to prepare them further. It is a vital first step.
Equally important is the need to have people assigned to mentor and coach these future leaders. In the era of flatter organizations and the war for talent, supervising and directing have given way to mentoring and coaching. An amalgam of definitions of these terms suggests that mentors are guides, focused on the individual and his growth; while coaches are instructors and trainers, focused on a specific job, the required skills, and achieving performance goals. So a high potential may have one mentor and several coaches as they move up the organization.
In this slower growth market environment, a key strategic priority in organization-minded entities will be to take a talent inventory and assign mentors and coaches.
