Transforming your CEO succession into progression planning
There are clear and definite steps Board members can take in making CEO progression a core feature of their business. We call these the five A’s.
1 Align strategically
Individual Board members might have a wish list of what they want in the next CEO, but objectives need to be aligned.
“I joke that we often think about what we want in a CEO the same way as we think about our coffee. Some like it with cream and sugar, some without,” says Stevenson. “And the same is true for preferences for the characteristics and experiences that different Board members want in the CEO. But we need to put personal preferences aside and instead focus on the business outcomes that are needed.”
Agree as a Board on the strategic priorities for the future, and align on scope and urgency.
2 Assess capabilities
It’s simple enough to see where possible candidates are in their career development, but it’s more important to judge their future potential. Look beyond their past experiences and instead assess their mindsets, drivers and motivations. Identify diverse talents who have the agility to form and transform simultaneously in different ratios, to meet various possible business eventualities.
3 Accelerate development
Once you’ve assessed candidates, don’t stop there. Help unleash their potential by moving them into new roles, either to address any experience gaps they might have or to give the board more visibility into their abilities as leaders.
Addressing mindsets or behaviors that could derail the business in future can be even more important than filling experience gaps. The Board, current CEO, and CHRO should continually assess the progress these individuals are making.
4 Access the marketplace
When the employment market goes through huge shifts, such as with the Great Resignation, it’s vital to understand the external landscape and compare how your company’s leadership potential stacks up against competitors.
Cover yourself for all eventualities by cultivating relationships with high-potential successors in the marketplace and, where possible, acquiring talent for developmental leadership roles. “This gives you succession pipelines outside and inside the organization simultaneously," says Stevenson.
5 Activate performance
Even when developed and eventually selected, no internal candidate will be 100% ready for the challenge and public scrutiny of a first-time CEO role.
Put support mechanisms in place to assist with the transition, including a team of complementary leaders with whom the CEO shares trust and common purpose. It’s the interconnectivity between the entire team that will build value for the company.
Fostering a CEO progression culture in your organization
By implementing these five A’s, Boards can make CEO progression part of a business’s DNA, leading to long-term stability and dynamism.
But it’s important to keep this progression process continual. In fact, Stevenson recommends cultivating at least three generations down the line, as you could easily see two CEO changes in as little as six to seven years.
The success of CEO progression as a whole depends on it being embedded into your organization’s culture. Progression planning isn’t separate from your business agenda—it is your business agenda.
By prioritizing an effective and smooth CEO transition years in advance, you’ll be ensuring long-term stability and, ultimately, profitability. You won't be leaving anything to chance. As Stevenson concludes, “When you have a seamless transition, what it means is that you’ve done the hard work in advance.”
Read more on preparing leaders for the C-Suite in our article, 7 Ways to Build Your Company’s C-Suite Leadership Pipeline.