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There’s No ‘One Size Fits All’ to Succession

By Pauline Nolte

Pauline Nolte

When speaking with clients about succession, one of the most common questions I’m asked is "What are other organisations doing?” While it’s interesting to hear about others' talent identification, assessment and development approaches, no two succession strategies should be the same because no two organisations are the same.

Yes, it’s true, there are a number of common levers that you can pull to drive positive succession outcomes, but an effective succession strategy needs to be reflective of an organisation’s unique business context. As an avid baker, I liken this to baking a cake—you can start off with a lot of similar ingredients but end up with a very different product depending on variables such as why you’re baking, who you are baking for, how much time you have, what raw ingredients you have, available support and budget.

When determining what sort of approach to succession is right for your organisation, here are a few key factors to include in your ingredients list.
No ‘One Size Fits All'

Context is crucial

When thinking about your context, what pressures is your business facing? Are you confronted by dynamic business demands or are things more stable? Is your organisation talent-rich or do you have a talent deficit? For example, if your organisation faces dynamic business demands and you have talent gaps, you might consider adopting an acceleration approach, in which you identify high potential leaders early in their careers and aggressively accelerate their growth. Or, you may decide acceleration is not a priority and focus on development, retention or acquisition.

Start with the end in mind

What are the real and measurable outcomes you are striving for? When preparing a business case for senior executives, paint a clear picture of the return on investment in terms of workforce metrics (the number of roles filled internally, the number of female leaders in specific job families or engagement) as well as true measures of business impact (number of new innovations, revenue growth in emerging markets or improvements in productivity).

What challenges will your leaders face in the future?

Translate your business strategy and your cultural priorities into a set of challenges that leaders in your organisation are likely to face over the next 3-5 years. At DDI, we call these challenges Business Drivers—they are the crucial lynchpin between your business strategy and your succession strategy. I’m working with one manufacturing organisation at the moment who is contending with the perennial need to deliver good shareholder returns in the face of increased competitive pressures and a need to better incorporate customer perspectives into all their business activities. Quite simply if they are going to meet their mid to long-term business strategies their leaders need to be able to execute their competitive strategy, drive profitability in the business and cultivate a customer-focused culture.

DDI’s latest High-Resolution Leadership research found that executives are better equipped to focus on challenges in the here and now such as improving quality, building relationships and focusing on customers and efficiency. They are far less ready to navigate the ambiguity that comes with more strategic challenges like building or reinventing brands, markets, organisations and cultures. What challenges will leaders in your industry and your organisation need to contend with in the next business horizon?

Mind the gap

There is no doubt that the volatile, uncertain, complex and ambiguous (VUCA) world we live in has resulted in increased demands on our leaders.

And whilst leadership demands are increasing, leadership readiness is decreasing. In DDI’s 2014-2015 Global Leadership Forecast Research, only 17 percent of organisations in Australia rated their future bench strength as strong and only 42 percent of organisations said they could fill critical positions immediately. This growing void between demand and readiness needs to be closed.

So, how can you close those capacity gaps? Perhaps consider:

  • Where your business is going and if you will have the right people in the right places at the right time to accomplish your long-term goals
  • What people trends your industry and your organisation faces (diversity, retirement demographics, regional recruitment trends)
  • The health of your current succession system—when is the last time you audited your practices, how engaged is your Board/CEO/Executive team, what role does HR play as an enabler of succession success?

Forget the cookie cutter

St. Honoré cakeThe St. Honoré cake is a tribute to the patron saint of bakers, and is a complicated confection even for pastry chefs.

If you can clearly articulate your desired business outcomes, what you need of your leaders and your capacity gaps, you have a solid foundation for your succession strategy. From there you can determine what tactics to deploy in relation to governance, talent identification, assessing readiness and accelerating individual and group development.

Succession becomes complex because there is no one size fits all approach. Don’t get caught in the trap of thinking you’re stuck with your existing approaches. When baking a cake, a new objective and a few subtle changes to ingredients can result in a completely different outcome. Why bake a St. Honoré when all you need is a simple sponge cake?

Pauline Nolte is a strategic account manager for DDI Australia.

Posted: 03 May, 2016,
Talk to an Expert: There’s No ‘One Size Fits All’ to Succession
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