Strategic Risk and Senior Succession at the 14th Annual HR Directors Business Summit 2016
The PERFORMANCE Management team was present at the HR Directors Business Summit in Birmingham, United Kingdom, between 2 – 4 February, 2016. Consequently, the insights gathered from experts present at the event had been gathered and exposed here, in a series of interviews and articles.
Radha Chakraborty – Director, Talent Management and Alasdair Wood – Director, Executive Compensation within Willis Towers Watson, talked about the increasing level of investor focus and board concerns over the quality of senior succession planning across their companies at a global level and the resulting risks to delivering a business strategy successfully.
According to their statements, good practices should consider the following aspects:
- Strategic risks due to the absence of a succession planning;
- Clear roles and responsibilities;
- Ensure a divers pipeline;
- Look at the group as a whole and identify gaps.
Radha and Alasdair emphasized the idea that it costs you more to hire someone from the outside, and this was based on the following research data:
What tends to go wrong?
- Nomination committees doesn’t understand the necessary assessment tools, terminology is oftentimes misunderstood and everything eventually goes back to instinctive tactics;
- Sometimes planning is focused on too few/too many individual roles, thus becoming narrow in scope and vision;
- Development plans are not taken seriously and no actions are taken to implement them;
- Poor understanding of the executive perspective.
What needs to be done?
- Informal and formal training regarding internally-used assessment methodologies and developing an understanding of the business’ needs;
- Managers should go the extra mile to meet and observe individuals that are in the pipeline for key executive roles;
- Data has to be provided in a more comprehensive format, so as to ensure informed decisions;
- Always expect the unexpected;
- Write leadership profiles, as it has to be crystal clear what you are and are not looking for.
We must never forget that managers have an important role in designing an efficient succession plan. They first start with building leadership profiles, then deciding who will be in the pipeline and in the end, they ensure the delivery of development planning projects and focus on retaining/engaging employees.
Last, but not least, managers should always make sure that the employees in the pipeline are willing to get promoted and fill in any strategic positions which require a certain succession plan.