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The aftermath of COVID-19, combined with the realities of the aging workforce (retiring Baby Boomers), has created more position turnover than normal. This is true in all parts of companies, including the C-suite. What takes years to build can be dismantled quickly if the replacement is not a good fit. Good succession planning and implementation matter more than ever.
I encourage listening to the podcast with Mark Clement and Dr. Chris Reilly: "Succession Planning Done Right: Culture, Continuity, and the CEO Transition at TriHealth" (Click here to listen). In the podcast, they lay out the steps TriHealth of Cincinnati took as Mark approached retirement. As a member of the TriHealth board, I saw firsthand what right looks like.
TriHealth filled the president/CEO position internally. The other option was to bring in someone from outside the organization. My preference is to fill spots internally if the organization is doing well, and to go externally if organizational performance is lacking. Jim Collins, in the book Good to Great: Why Some Companies Make the Leap...and Others Don't, noted that 10 of the 11 companies that moved from good to great had CEOs who came from inside the organization.
My observation is that many replacements are people from outside an organization. This makes perfect sense if the organization is not doing well. However, even when it is performing well and/or trending in a good direction, boards often still decide on a national search. Why is this? One reason is that a board gets very little negative feedback if they announce a national search, especially if they share that internal candidates will be considered. It seems like there's no downside. Yet, there can be. People internally can ask, "Haven't I done enough to prove myself?"
Are there times when an external search may not be needed? Yes: when the organization is doing well and trending in a positive direction, and there is at least one solid candidate for the open position (or, as in the case of TriHealth, a soon-to-be-open position). To go national in such cases sends a disheartening message internally.
A few tips:
Invest in people across the organization. Succession needs occur at all levels and in all departments. People are more likely to stay if they are invested in. Those who want to advance will see a road map on how to do so.
Use outside resources for succession planning. In the podcast, there is discussion on the use of an industrial psychologist. This helps make sure the fit is right for the person and the organization. The fact that a person is good in their current role doesn't automatically mean they will be successful in another role. One may be an excellent vice president. However, the role of president has a wider scope. Using additional resources for succession planning is helpful. I hear people say, "That adds cost." Yes, it does...but what does an unsuccessful hire cost?
Make sure all leaders know that talent development is key to their role. If a leader shares that they have no one who can replace them, it is a red flag that they are not developing people, or they may fear being replaced. It is important to provide positive feedback to those who develop others.
As leaders, it is our responsibility to prepare the organization for when we're no longer there. Developing people who can step into larger roles helps us ensure that today's progress continues tomorrow.
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Quint Studer is the author of 16 books on leadership in the workplace and the community. His book Building a Vibrant Community is a valuable resource for civic leaders, business owners, and all citizens who have a stake in building a community they can be proud to call home. In Sundays with Quint, he shares a selection of his popular leadership columns for leaders, employees, and business owners in all industries. He can be reached at Quint@QuintStuder.com.