The global pandemic has struck terror into the hearts of nearly everyone. Business leaders and board members are reeling from the rapid impact on their organizations, across public companies, small businesses, non-profit organizations and more. Everyone has been affected.
One of the less discussed impacts, which is shaking boardrooms and executive suites, is the issue of leadership succession. Deciding who leads is a board’s most critical responsibility. While proactive succession planning has long been a best practice, too many institutions still do not emphasize leadership succession seriously enough or review their plans often enough. And now, with the scourge of Covid-19 upon us, organizations and boards are quickly taking a long, hard look at the quality and quantity of their succession plans.
One only needs to review the headlines to know that the issue of succession has reared its head again due to Covid-19. British Prime Minister Boris Johnson is infected. The CEOs of Altria, British Telecom and Madison Square Garden have all confirmed their infections. Jeffries & Co. CFO Peg Broadbent sadly died from his Coronavirus infection. Even before COVID-19, consider that only in recent days did JP Morgan CEO Jamie Dimon return to work from a month-long absence, after emergency surgery for a major heart condition. Succession is always a serious matter, and never more so than today, when a random and unseen enemy could impact anyone at any time.
What is a board or incumbent leader to do, particularly in more entrepreneurial organizations without a deep bench of talent? Here are a few key strategies:
- Designate an emergency successor immediately. There should always be someone appointed to keep the train on the tracks in times of crisis. This also allows those in control (owners or directors) a bit of time to formulate a long term leadership strategy.
- Review succession plans for all C-Suite and Key Executive roles (CEO, CFO, COO, etc.) with regular frequency. Regular means no less than annually on a formal basis, and more frequently if a planned orderly transition—such as a CEO retirement—is coming in the not-too-distant future.
- Take a good look at existing talent development plans across your organization, especially those 2-3 levels below the top. What is being done to develop, coach, mentor, and strengthen the skills and leadership competencies of high potential talent within the institution? These employees are your most valuable workers, and the ones with the most career options. Are you truly taking care of their needs while also serving the organization’s future?
- Centralize efforts at talent attraction, retention and development across the organization. Succession is a multi-faceted endeavor, and needs some level of consistent oversight to make sure that key players are not falling through the cracks or being shortchanged. It happens all too often, and perceived greater career upside is the single biggest reason why a high potential often leaves. Do you have a strategic HR leader to assist with these efforts?
- Lastly, pay personal attention to those up-and-comers. If you’re a leader, whether the CEO, General Manager, Owner or C-Suite Executive, it’s your personal involvement with high potentials that makes them inclined to stick around. Let your rising stars know that they have a bright future, and that you have plans for them. Communicating regularly does more than almost anything to keep them in the fold. Then challenge them with special projects, new assignments, and out-of-the-box opportunities, to test them and to help them grow.
Two-thirds of our current CEO succession projects arose from unplanned openings at the top—and this was before Covid-19’s full onset. We see such leadership transitions all the time in our business, and companies should work to minimize the impact of unforeseen leadership changes. Smooth transitions of power from within an organization are the least disruptive, and are typically most effective when the rising talent has been well prepared. Unfortunately, unexpected things happen, and organizations need to be ready for leadership succession in good times and bad. Hopefully one of the lessons from this global pandemic will be that more institutions will strengthen their succession planning efforts, to better protect themselves in the future.
Alan J. Kaplan is Founder and CEO of Kaplan Partners, a retained executive search and board advisory firm headquartered in suburban Philadelphia. He can be reached at 610-642-5644 or alan@KaplanPartners.com.