A Fit-For-Purpose Succession Strategy Mitigates Operational Risks

MISSION:

A major Fortune 100 company, operating within a turbulent business environment, experienced rotating CEOs and numerous reduction-in-force events. As a result, the new CEO as well as the senior team were concerned with operational risks associated with potential leadership departures. Engagement scores were significantly lower than benchmark, and the retirement age of its population indicated that many leaders were eligible for retirement. To continue to compete within its industry, our mandate was clear: prioritize and mitigate operational risks associated with pipeline gaps, establish a systematic approach to succession planning, and develop a longer-term fit-for-purpose strategy for leadership development.

An analysis of the current leadership development and succession planning practices was conducted, which revealed that there was limited data on top leadership and emerging leaders, and there was no common language across the business to discuss talent.

LEVERS:

The plan included four major elements:  analyze data on current leadership bench strength; agree to enterprise-wide performance standards; establish simple, yet meaningful, metrics; and gain buy-in and pilot a standardized succession process, including a CEO talent review.

Demographic and career data was gathered on the top 200 leaders. We worked with the senior team to align on the business case for leadership development and succession. We determined the company’s mission-critical roles and agreed to a common definition of success in these roles now and in the future as the business evolves. A talent assessment was developed to identify high-potential talent to differentially invest in talent development. A phase-two project included a universal leadership competency model to assess individual and aggregate leadership gaps through a 360-degree assessment process. A change management and communication strategy was developed to gain input from key stakeholders within each of the company’s businesses.

Multiple leadership events were held to build leadership capability and to provide feedback on aggregate and individual leadership strengths and opportunities.

IMPACT:

The company went from having deep concerns in key operational areas to investing in the development of next generation leaders for mission-critical roles. The organization now has a common platform and language to identify, assess, and share talent across the business in a systematic way. To the CEOs surprise, 20 percent of the executive team was not suited for the leadership positions of the future as the business was evolving. Those individuals were soon replaced or deployed throughout the business.

This success is attributable to several key factors: the clear line of sight maintained, the CEO agenda, the identification of mission-critical roles, and the development of common performance-based standards and success profiles.