Canadian HR Reporter

SEPTEMBER 8, 2014 CANADIAN HR REPORTER & STRATEGIC CAPABILITY NETWORK Credit: iconspro (Shutterstock) Succession planning not just about CEO It's about looking at talent on multiple levels BY LIZ BERNIER When it comes to succession planning, if the CEO role is the only one you're focusing on, then here's the bad news: You're doing it wrong. at was one point that David Gibbons and Paul Gryglewicz raised at a recent Strategic Capa- bility Network event in Toronto. "When we say CEO succession, we really mean looking at succes- sion overall… (it's) really about succession throughout the whole organization, so when everybody starts to move up, the backfi lling (is) there," said Gibbons, who is managing principal at Korn Ferry leadership and talent consulting in Vancouver. What makes an eff ective suc- cession plan centres largely on the amount of actual planning that goes into it — and the aware- ness and understanding of the tal- ent you have, and the talent you need, on multiple levels in the organization. "Succession, for those com- panies that do it right, (involves) a lot of work. ey don't start it tomorrow — they started it yes- terday," said Gryglewicz, manag- ing partner at Global Governance Advisors in Toronto. A common pitfall is only paying attention to the succession plan when it's known someone is go- ing to leave, said Gibbons. "(But) succession is what we build upon in terms of the entire focus of our leadership pipeline, and so thinking about this, and moving an organization away from replacement planning by moving it into our overall talent strategy processes will help us have a clear view of our leadership pipeline," he said. " e key here is thinking more than just one CEO ahead. So it's not replacement planning — we're not just looking at who is successor for the CEO." Aligning perspectives One of the most complex factors in succession planning is the sheer number of disparate perspectives that need to be reconciled with one another, said Gryglewicz. "Coming into a succession planning exercise and working with your board, you're going to be experiencing nine diff er- ent perspectives — maybe it's a 12-person board with 12 diff er- ent perspectives. Maybe manage- ment has another perspective… maybe we should think about the shareholders too, because they have a perspective too," he said. "Today, if you're a publicly traded company, those sharehold- ers get to vote on how you choose those individual directors. So, now, there's thousands of indi- vidual perspectives." As a result, the spotlight has never been greater in terms of the degree of transparency around how a board operates and who that company picks as the leader, said Gryglewicz. " ere are diff erent viewpoints coming into succession that exist in the marketplace," he said. "In so much literature, there are often- times diff erent viewpoints around who's done succession planning the best or who's had the most success." One example that's often cited is Jack Welch — former CEO of General Electric — and his fa- mous "horse race" for a CEO replacement. Years in advance of when he was going to exit the organization, he identifi ed three high-potential individuals he wanted to compete for the CEO role, said Gryglewicz. " e reality is, and Jack Welch has admitted through time, that any one of those individuals could have actually been the next leader of General Electric because each one was such an overachiever and met all the targets." But there are detractors. "On the fl ip side of the horse race is that sometimes it's criti- cized because organizations fear an internal competition will lead to an unfortunate exit of high- potential talent," said Gryglewicz. But probably a much bigger is- sue is when there is no plan at all and the successor CEO is chosen hurriedly or by default. "By putting succession into a reactionary phase, it's a really probable case that you can have a costly interim period where your next best pick — who you may think is ready and the right person — doesn't last very long. at doesn't necessarily help the shareholder base or your stake- holders in the organization," said Gryglewicz. Challenges, best practices ere's added pressure due to the fact that there is more pressure on succession planning than ever be- fore, said Gibbons. "There's more external pres- sures on us, more regulatory over- sights on us… from the research out there, we all know how costly it is," he said. "We know that if we get this wrong — we put the wrong people into our critical roles — it's costly." So what gets in the way of orga- nizations doing a great job? ere are a few questions companies should examine, said Gibbons. "Do we have the planning and the rigour in place within our organization or is it ' at's nice to have' and we kind of push it aside?" he said. "Are we taking the time to take this seriously throughout the or- ganization — not just in the hu- man resources divisions and de- partments, but within the whole organization?" Another area to examine is whether there is the necessary alignment, said Gibbons, between the strategy of the organization — the business plan — and what the talent strategy needs to look like. "Often, there's a lot of misalign- ment around that." Another challenge is simply the fact humans are involved, he said. "And we all know how that adds complexity. The differ- ent perspectives on the types of individuals who are going to be TAKE > pg. 11 "By putting succession into a reactionary phase, it's a really probable case that you can have a costly interim period where your next best pick doesn't last long."

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