The Role of the CEO in Succession Planning
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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
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:
1. Match the available current talent with the needed future talent: An
organization gains a competitive advantage in the marketplace through the
development and use of a small number of core competencies that are effective
across a number of product lines and services. What core competencies are
required today? What core competencies are required to live your strategic plan
of the future? Where are the gaps? A core competency is deliberately created by
the executives of your organization. They decide what is needed and
systematically allocate resources to develop and sustain core competencies.
2. Help the organization successfully meet the strategic and operational
challenges: Organizational capabilities and the skills of people are combined to
form a flexible, agile company that is focused on member needs and is adept in
responding to them. What technical skills and knowledge are required to meet
future operational challenges integral to the strategic plan?
3. Mitigate risks: Everyday, with the right people, with the right skills and
knowledge, in the right places is another day of mitigating risks on behalf of
your members. This requires a fluid, dynamic and flexible talent pool with a
culture that is inspired through people development.
Generations 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.
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).
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.
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.
Start a Succession Plan for your middle level managers. Include people
development as part of every performance review for every manager and
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.
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
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.
Essential building blocks to creating a robust succession plan include;
* itting substantial time and resources to developing competencies in support
of the purpose of your credit union.
* Linking and aligning the organization's core values to job competencies. A
core competency is a unique bundle of technical expertise and know-how that is
central to the core purpose of your organization; it spans multiple divisions
and business units.
* Creating significant and definable opportunity to outperform competitors in
core products and services.
Defining high potentials:
# Differentiating your high and potential high performers.
# Investing in the high performers so they meet the competency requirements
of the future. Compensating for Excellence:
# Deciding that excellence is your benchmark and creating performance
strategies accordingly. Competencies in position descriptions are
behaviorialized so they are observable and verifiable.
# Rewarding, through incentives those who constantly raise the benchmark for
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.
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
About the Author
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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Article Published/Sorted/Amended on Scopulus 2007-08-06 16:26:47 in Business Articles