Tips for CEOs, Boards and Company Builders: 7 Succession Mistakes to Avoid

Steve Jobs at the WWDC 07

Steve Jobs at the WWDC 07: Image via Wikipedia

The trickle down process is in high gear.

Steve Jobs takes a second medical leave and everywhere business people are scurrying around to do or dust off CEO succession plans.

The fact of the matter is most people avoid contingency planning (Tornado? What tornado?) like Republicans and Democrats avoid candid, authentic dialogue about taxing and spending realities. Succession – particularly at the most senior levels like the CEO – invites thinking about the unthinkable; things like death, firing, or getting “your guy/gal” at the top swiped by another competitor.

As noted in Football Coaches and Outsider CEOs – When the Messiah Isn’t, selecting CEOs and other senior staff is a trail littered mostly with failure. Most companies do it poorly; something like 55% of outside CEOs fail. Last week Time Inc.’s CEO Jack Griffin was fired after six (count ’em – 6 ) month’s on the job. Total “egg on face” for parent company TimeWarner CEO Jeff Bewkes who hired Griffin, regarding Bewkes’ assessment and leadership skills but the result was not-so-unusual – just faster than most.

There will be an upcoming piece on what companies who do succession planing well do that separates them from the majority of firms. In the meantimes here’s a list via search firm SpencerStuart’s Point of View edition from this winter [Disclosure: I have done business with the firm; SpencerStuart has placed me for a search for which they were engaged.]

Here’s SpencerStuart’s “Seven Succession Planning Missteps Boards Should Avoid:”

  • “Failing to Align on a strategy.” Before choosing a senior hire, the board fails to explicitly define what the company’s strategy is – thus meaning they don’t identify the type of skills they need to have at the wheel to lead the company forward.
  • “Over-involving the entire board.” Good assessment and selection takes time – time that many board members don’t have to give. The search should involve people in key board roles, but people who have the time to spend on the process.
  • “Conducting internal assessment too late.” Doing succession planning early and often means that developmental plans can be put in place for internals – meaning a much better shot at the top when an opening develops.
  • “Creating a ‘horse race’ too early.” While you’d like to size up internals early and often, creating competition between people that sabotages competition is unwise and unhelpful. Better to have assessments done as a part of an ongoing developmental process rather than just when an opening might occur.
  • “Neglecting external benchmarking.” Benchmarking internal talent against external talent is a great way to figure out where a firm’s human capital sits on the talent spectrum. If you benchmark in other areas it’s a no-brainer to benchmark your talent.
  • “Overvaluing external candidates.” My constant experience – unlike the opposite of the more common English idiom – has been the companies are more attracted to “the devil they don’t know rather than the devil they do know.” My experience with C -level search is that people see the flaws of people like internal candidates they know better than the people like external candidates they don’t know – and frequently underestimate and take for granted those internal people’s talents.
  • “Failing to update the plan.” Good succession plans, like good business plans, are living, breathing documents. Far better to have these plans simple and effective than long, seldom used, and seldom useful.

It is the rare board member or executive who has deep expertise in candidate assessment. Succession plans may be one of those areas where it is cheaper and easier in the long run to bring in outside expertise to help set up and coach a process that works well than try to do it yourself and end up with a botched product that in retrospect is rarely used and never helpful.

Life Back West is an occasional set of writings focused on ways people, teams and organizations can be both more effective (doing the right thing) and more efficient (doing the right thing well). More about executive, career and team / leadership coaching services can be found at the “About J. Mike Smith and Back West, Inc.” sidebar or the “Hire Me” tab above. You can also read an online interview with me at WhoHub, as well as participate in my learning community courtesy ofKnowledgeCrush.

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