Ready '¦ Set '¦. Who?
Majority of C-Suite Executives Say There is Not a ‘Ready Now’ Successor for Their Role, According to Korn Ferry Survey
LOS ANGELES, May 6, 2019 —. According to a recent Korn Ferry (NYSE: KFY) survey of C-Suite executives in companies across the globe, there is a shortfall issue, with 77 percent of respondents saying there is not an internal ready-now successor for their role.
Korn Ferry surveyed executives across several C-Suite roles, including CEOs, CFOs, CHROs, CMOs and CTOs. Nearly half (42 percent) of respondents say their organization does not have a comprehensive succession plan for their role.
“Often organizations are so busy trying to outpace the competition and provide value for customers and shareholders that they don’t take the time needed to plan for the future,” said John Petzold, Korn Ferry senior client partner and leader of the firm’s CXO Optimization Practice. “An exodus of a senior leader could be unplanned and swift, which could leave organizations vulnerable if a ready-now successor isn’t already identified and developed.”
Following is a breakdown of results by role:
|Role||Percent who say there’s not a ready-now successor for their role||Percent who say there is a comprehensive succession plan for their role|
|CEO||76 Percent||40 Percent|
|CFO||80 Percent||38 Percent|
|CTO||71 Percent||41 Percent|
|CMO||84 Percent||41 Percent|
|CHRO||76 Percent||52 Percent|
Chief Executive Officers (CEOs)
Of the 222 CEOs who participated in the Pulse Survey, 76 percent say there is not a ready-now successor for their role, and only 40 percent believe there is a comprehensive succession plan for their position.
“Identifying and developing a CEO who can drive performance and transformation doesn’t happen overnight. It requires companies to move from just-in-time transition planning to ongoing progression planning,” said Jane Stevenson, global leader of Korn Ferry’s CEO Succession Services “As soon as a new CEO takes the helm, he or she, along with the Board, should begin the process of creating a plan to identify and develop not only the next company head, but a team for future success options for key senior leadership positions.”
Chief Financial Officers (CFOs)
The 2019 CFO Pulse Survey of 222 chief financial officers found that, when planning for a successor, only 38 percent of CFOs believe they have a comprehensive succession plan, and 80 percent do not feel there is a ready-now successor for their role.
“The number of CFOs who don’t feel they have a formal succession plan or a direct report ready to replace them now should raise concern. And yet, despite the lack of perceived readiness, approximately 60 percent of appointed CFOs are still sourced internally,” says Bryan Proctor, senior client partner and Global Financial Officers practice lead at Korn Ferry. “It’s critical for organizations to understand their talent balance sheet, have a pipeline of potential leaders, and develop a thoughtful succession strategy that provides transparency on potential and offers experiences necessary to fully prepare CFO successors.”
Chief Technology Officers (CTOs)
The Korn Ferry Technology Officer Pulse Survey of 194 technology officers found that 71 percent say they do not feel there is an internal ready-now successor for their role. In addition, 41 percent of technology officers do not feel they have a comprehensive succession plan.
“Technology officers are increasingly becoming an integral part of the C-suite and essential to an organization’s business success,” says Craig Stephenson, managing director of Korn Ferry’s North American Technology Officers practice. “It’s critical that organizations identify and develop a strong pipeline of successors across the technology function. It is an important aspect to ensure the rapidly evolving technology function continues to play an even greater role in helping organizations set and execute their business strategy.”
Chief Marketing Officers (CMOs)
Korn Ferry’s survey of more than 200 marketing leaders found there is a looming leadership crisis facing the function, with 84 percent of CMO respondents saying there is not an internal ready-now successor for their role and only 41 percent believing there is a comprehensive succession plan. Compounding those issues of lack of successorship is the historically short tenure of CMOs.
The survey also found that 41 percent of CMOs see strategic thinking as the top capability gap they are focused on developing in their direct reports.
“Given the proliferation of specialists in the marketing function, and the fact that there is not often enough focus on developing those specialists into strategic generalists, is likely why strategic thinking is a gap and is one of the reasons there is a challenge finding successors in the ranks,” said Caren Fleit, managing director, Korn Ferry Global Marketing Officers Practice.
Chief Human Resources Officers (CHROs)
The 2019 CHRO Pulse Survey of 193 chief human resources officers found that CHROs are concerned about who will succeed them, with 76 percent of respondents saying they do not feel there is an internal ready-now successor for their role, and only about half (52 percent) reporting they have a comprehensive succession plan. In addition, when asked about the capability gap that they are most focused on developing in their direct reports, 44 percent said strategic thinking.
“Grooming CHRO successors is a difficult challenge, because the greatest skill gaps we see in potential successors—board exposure, managing the compensation committee relationship, and executive compensation knowledge—are also the most difficult areas for a CHRO to delegate,” says Joseph McCabe, Vice Chairman in Korn Ferry’s Global Human Resources Center of Expertise.
About the Survey – The global Korn Ferry survey included responses from nearly 900 chief executive officers, (CEOs), chief financial officers (CFOs), chief technology officers (CTOs), chief marketing officers (CMOs) and chief human resource officers (CHROs).
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people.