Strengthening Your Leadership Bench with External Succession Planning, Part 2

article by Dr. John Sullivan and Master Burnett External succession planning is much like traditional succession planning, with the exception that the scope is expanded to include both external talent and job assignment opportunities for development outside the organization. Expanding the scope patches a critical flaw in many organizations: the shortage of suitable talent for development and the relative lack of development opportunities. Moving forward, let’s take a look at the high-level steps involved with putting into practice such a program. External succession planning starts with the concept that there is a commitment to develop and follow a documented plan and strategy with regards to the leadership of the organization. The motivation behind this commitment is not as important, but most would agree that one of the primary drivers is to ensure consistency in the execution of medium- and long-term corporate objectives. (The absence of consistency produces organizational volatility, which in turn dictates that management spend as much if not more time managing the volatility versus the execution of strategy.) Beyond this commitment, what follows are the major steps: 1. Make the business case for external succession planning. The first step is to present arguments to your senior leadership about the need for including external talent and development opportunities in your succession plan. Generally that means documenting current development problems/shortages, and putting an estimated dollar cost to each. This business case should include comparisons between the performance of various leaders who have undergone development as planned and those who have not. It should also take into consideration the costs associated with having a position vacant and hiring externally. 2. Identify targeted positions. The next step is to identify which positions will likely require replacement talent in the next 6 to 18 months. You begin by looking at your current succession plan in order to identify the positions with severe shortages to target. The steps include:

  • Identify the positions where you clearly have no qualified internal candidates already on the bench.
  • Identify positions where there is only one qualified candidate and you would like the option of having other talent to consider when the leadership position becomes open.
  • Identify the positions where new ideas, different perspectives, or experience from outside the industry would be beneficial.
  • Identify positions in growth areas where you are likely to develop new products, new customers or where you are likely to venture into new geographic regions. Although you might have some internal candidates in this area, it’s best to assume that the talent you need is likely to be external, because these individuals already have experience in these vital areas.

3. Identify avenues of development. After identifying weaknesses in your leadership bench, the next step is to identify all of the possible avenues available to you to develop internal talent. The steps involved include:

  • Identify what types of development activities are needed to develop up-and-coming leaders on hand into weak bench positions.
  • Analyze current job assignments available and determine what development shortages exist.
  • Identify the complete list of firms you could partner with that might be able to provide the job assignments needed. (The term “partner” here implies that both parties get something out of the deal. Consider trading up-and-coming management with partners; it might just be the case that their development shortages correspond with yours.)
  • Establish formal relationships with all parties involved surrounding expectations when suitable opportunities are found.

4. Identify external talent? Once you have maximized your potential use of internal talent, turn your attention to plugging your remaining holes with external talent. Some of the best ways to identify talent at other firms include:

  • Use name research firms to identify potential individuals by title, both within and outside your industry.
  • Ask executive search firms that you work with to provide you with the names of individuals at target firms that are likely to be open to developing a relationship.
  • Ask your recruiters to identify key individuals within your industry, and specifically at your direct competitors.
  • Make benchmarking calls to target firms in order to identify who is an expert in the areas that you will need leadership talent.
  • Look at your firm’s consultants, suppliers, and customers as potential sources of talent.
  • Target firms there are well known for developing leaders, including Dell, Wal-Mart, Southwest, GE, Intel, Microsoft, Ikea, SC Johnson, Pepsi, American Express, FedEx, IBM, Toyota, and McKinsey.

Remember, because there are no guarantees that these external individuals will accept your position, it is generally wise to identify two to five individuals at the start of the process. 5. Build a relationship with external talent. Once you identify the external talent to target, you’re only halfway there. Successfully capturing these individuals requires building a long-term relationship and selling them on the value of moving to your firm. Some of the things you can do to increase the odds of them accepting your offer when it occurs include:

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  • Begin building the relationship by meeting with them at professional events that they regularly attend.
  • Identify their career goals, their current frustrations, and their dream job. Ask them specifically what positions they would like to obtain in two to five years and what their “job switch” criteria are.
  • Provide them with a profile of your organization and the opportunities it provides. Be prepared to do a side-by-side comparison between the opportunities they have at their current firm and the opportunities that you might provide.
  • After building a relationship for at least six months, hold a “someday we would like you to work here” discussion with them. Be direct. You want them to work for you, but you don’t want to push a specific timeframe. Just convince them that someday you would like them to work for your firm. Let them know about external succession plan and your wish for them to be part of it.
  • Periodically seek out their advice. You might even consider asking them to serve as an external consultant on interviewing teams. If they work for a non-competitor, hire them for weekend work or “vacation time” consulting projects.

6. Consider the potential problems. Including external candidates and development opportunities in your succession plan requires some degree of project management skills and political abilities, but the rewards are well worth it. To increase your chances of success, consider addressing the following potential problems before they arise:

  • A number of the external candidates you approach will not be interested in your opportunities, i.e. plan on rejection.
  • Some candidates rotated out for development may decide they prefer the new organization more and renege on plans to return.
  • Some individuals will “use you” just to get to a certain management level then spin out of your organization.
  • Some individuals will fail to keep silent about your future intentions.
  • Development partners may leverage your program to steal competitive secrets and share them with others.

Conclusion Hopefully, you can see the advantages to using external succession planning and the relative ease with which a program can be created. It obviously provides a way around many of the shortcomings in leadership development and succession that exist in most firms. It’s not a panacea but it is a viable option in the field of succession planning, which under current designs has a failure rate over 66%. So start thinking of your firm as a sports team and begin looking at other firms as your “farm teams” that are capable of developing talent for you. All you must do is develop a process that allows you to have the talent when you need it.

Dr. John Sullivan, professor, author, corporate speaker, and advisor, is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business-impact talent management solutions.

He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on staging.ere.net. He lives in Pacifica, California.

 

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