Your Succession Plan Starts a Lot Earlier Than You Think
I recently began working with a small engineering firm to help them with their CEO and COO succession plan. In their favor... they are planning 2 – 10 years in advance (two years for one role and ten years for the other) and they have three potential internal candidates whom they hope will rise to the C-Suite.
Unfortunately, they were unaware that they also have a looming leadership crisis.
As I always do before starting work with a new client, I asked for some HR data:
how many employees over the age of 50?
what is the rate of turnover?
what is the average tenure?
The bar-chart they provided me (see image) depicting tenure was alarming - there is a large gap in mid-career professionals! The employees at this company have been there for eight years or less, or 20+ years. There really is no one who has been there for 10 to 20 years.
Do you see the problem that I see? While the firm's leadership is concentrating on their upcoming succession, I am looking down the road to the next one. Right now, it appears they will not successfully have another succession without some major decisions about grooming their younger workers to accelerate their leadership capabilities or potentially hiring from outside the organization so that the new CEO doesn't turn around in 10 years and realize there's no one for him to pass the baton to.
A recent Korn Ferry article tells us that this situation is going to be more and more common in the coming decade because companies are not hiring as many young, unskilled, entry-level workers as they have in the past. In fact, jobs growth for college graduates is expected to be negative for 2024. Kate Shattuck, a global co-leader of Impact Investing and ESG and Sustainability at Korn Ferry sums up the future: Firms risk creating a leadership and management vacuum by not building a bench of young talent. It sets the stage for a crisis ten years from now when you don’t have people to take over.
So – what are some things you can do to mitigate this risk?
Of course, it starts with getting younger workers in the door. And one of the best ways to do that is through the use of career paths. Identify what skills will be learned in each entry-level role and how those skills might be utilized in different roles (aka through lateral moves). Map this out in a colorful way on a piece of paper to be used during recruiting and interviews. Young people today would like to have a long-term career at your firm, but most of them don’t see it as a possibility because they only see career growth as a vertical path. Demonstrate to them that they will have the opportunity to learn many areas of the business in order to find their “happy place.” 😊 Ultimately, this benefits the organization because you have better-skilled employees to choose from for future-leader roles.
If you find your company to be at immediate risk, like the company depicted in the image, then start now to purposefully hire mid-career managers. There are two important parts to the previous sentence:
Start Now – so that you can be choosy about who will join your team. If you know that you need to hire a mid-career professional today to fill a future leadership role ten years from now, you can take your time to find the perfect candidate whose skills, ambitions, and potential will meet your future needs.
Purposeful means ensuring that you have clearly established what a leader looks like and how they behave in your organization.
Every organization has a “definition” of a leader, but it is rarely voiced out loud. A leader in a healthcare setting might be valued more for their ethics, compassion, and ability to manage chaos. While a leader in a tech company may be valued for innovation, collaboration, and risk-taking/risk management. Without a clear definition of the skills and behaviors of a leader in your organization, hiring “any old” mid-career professional will not necessarily ensure that you are also hiring a future leader. If you’d like help identifying the behaviors of a leader in your organization, you can start with this starter list I’ve been developing for the last year by polling all the audiences I’ve spoken to.
This article was originally posted on LinkedIn.