Any leader who is even remotely concerned about the long-term success of their organisation will have a succession plan in place. But that’s only half of the story.

Human Resources Director Rob Cross asks, “Are you merely paying lip service to succession by adding names to a spreadsheet? Or do you have a dynamic process in place that gets the best out of your internal talent, while benchmarking them against external candidates and properly closing succession gaps?”

Effective benchmarking

Liz Stewart, Head of Executive Assessment and Development at Odgers Berndtson in London, is clear.

“Many organisations do a lot of plotting of internal talent, but it often fails to deliver successful outcomes.”

Stewart recalls an example from one of the many organisations she has worked with. “When a big role came along, the identified internal successors were benchmarked against external candidates and an external candidate got the job. The organisation was baffled. It felt it had selected internal candidates with potential, but we discovered they had not benchmarked them through their succession planning process or provided capability development. Failing to get the job then left the executives demotivated.”

To avoid this fate, investing in active succession management is key.

Research suggests that if internal candidates do benchmark well against external candidates and get the top jobs, they actually deliver a better result for the organisation in the longer term. This is at the core of the Odgers Berndtson Active Succession Management process: actions designed to help organisations leverage their best internal (and external) talent.

Comparing apples with apples

Relevant questions for organisations hoping to step-up their active succession management efforts include:

  • Have you identified individuals with the potential to progress to senior roles? Past performance does not guarantee success in broader roles with new challenges.

  • Have you invested in developing individuals for top roles? They should be groomed to deal with complexity, navigate diverse perspectives and personalities, and persevere, despite volatility, uncertainty and failure.

  • Have you evaluated internal and external candidates on a similar basis? An apples-to-apples comparison is essential.

Says Stewart with respect to her example organisation: “If we had been involved earlier in their succession and talent process, we could have helped them identify potential more accurately and put together a better development programme, while also helping to track their internal talents’ development against the broader pool.”

Successful succession

Active Succession Management equips the Chairman, CEO and HR team with an approach, processes and tools to identify, develop, and retain a strong and diverse succession pipeline.

It also enables more effective external benchmarking and market mapping to ensure the succession pipeline contains an optimal mix of internal and external talent.

“A lot of succession management and planning has been about identifying the elite few that might go to the top,” Rob Cross emphasises. “But most of today’s MNCs realise that it’s a very limited pool.”

 “To fully leverage the value of your talent, whilst preparing those with the potential to progress, you first need to be classifying your talent appropriately and then deploy and develop them in the right way.”

“The interesting thing,” adds Stewart, “is that although the research is clear: only 29% of high performers are likely to be successful in new, broader and more senior roles, but 60% of talent has the opportunity to improve their performance by deepening their expertise.”

Check-list

Stewart adds that the first thing an organisation should check is whether their potential model adequately covers an individual’s

  1. intellectual capacity and flexibility;

  2. emotional intelligence and interpersonal skills;

  3. resilience and ability to deal with challenging situations;

  4. motivation and discipline to learn and relearn.

An individual’s capability across all of these dimensions of potential can be assessed using Odgers Berndtson’s LeaderFit™ model.

Importantly, while one can score high in these four areas, “to progress, individuals also require the ambition to release their potential in the roles being targeted, meaning that they have to want to be better and go further,” adds Stewart.

Active learning

Research shows that high-performing senior executives are very self-aware but, says Stewart, “you need to help them apply their talent and be stretched through ‘on the job’ experiences” since 70% of our learning comes on the job.

With Odgers Berndtson’s action learning approach, executives take on real projects or tasks that they haven’t done before, where they need to work with others and have clear personal learning objectives, as well as business goals.“This type of development not only helps prepare the individual, but it also gives the business strategic flexibility as they assign their best people to areas where they can deliver greater value,” Stewart explains.

Retaining the best

Active Succession Management also manages the risks of losing internal talent once they realise their potential. Stewart adds: “If the organisation doesn’t channel and nurture these individuals, they will quickly move on. I have seen this in organisations where there’s been a perceived lack of parity or movement by the incumbent CEO and they lose a number of C-suite directors to other organisations.”

Cross echoes these sentiments: “Making sure that you continue to set stretching performance goals according to their potential helps the executives feel they are being acknowledged and given the best chance. Making sure the CEO is sponsoring these individuals’ development and taking account of on-going feedback as to how they’re improving, including the use of 360 surveys or coaching, is absolutely critical.”

Stewart continued, “If only 40% of an executive’s performance derives from their experience and skills, assessment of leadership competencies and potential provides for a fairer competition when recruiting talent.”

“Odgers Berndtson’s in-depth LeaderFit™ assessments and Active Succession Management process create not only a fair playing field but also equip organisations to develop individuals to realise their potential.”

This article is from the latest ‘Talent and Potential’ edition of the Odgers Berndtson magazine, OBSERVE.

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Find out more about LeaderFit™

Elizabeth Stewart

Elizabeth (Liz) has over 30 years as a business consultant, working for global professional services firms, and in the last 15 years focused on advising on Boards, CEOs, the C-Suite and their pipel...

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