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Revamping succession planning
With CEO turnover at a two-decade high and an average tenure of fewer than 7 years, succession planning has emerged as a cornerstone of strategic readiness. Companies recognize that, for a seamless leadership transition to occur, they need to invest in a more robust approach to succession.
Yet, Korn Ferry’s recent study of top HR leaders and managers revealed that, while 90% of organizations acknowledge the importance of succession planning, only 37% back this recognition with substantial financial commitments. This discrepancy underscores the critical need for companies to align strategic priorities with investments in resources and talent if they want long-term success.
To bridge this gap, experts recommend a multi-strategy approach that considers succession planning as an investment in the future. “By aligning their resources with strategic priorities, companies not only protect themselves from unexpected leadership gaps but also bolster their organizational resilience,” says Bryn Chighizola, Senior Manager of Organizational Research in the Korn Ferry Institute, Korn Ferry’s research arm.
In its new paper, “Revamping Succession,” Korn Ferry unravels the disparity between what businesses think about succession planning and the actual resources they dedicate to their efforts. The paper also examines the different—and often, disparate—approaches taken by organizations and offers fresh insights to help leaders reimagine and refine the succession process.
While organizations value succession planning, there is no consensus on a specific strategy—nor is there only one strategy that companies use. Instead, they often employ more than one approach for succession planning to cater to their unique needs and strengths, according to Korn Ferry’s new report.
There is, however, an emerging trend in succession planning that businesses would do well to follow, experts say. Traditionally, succession planning has focused on senior leadership, but today, more organizations are broadening their efforts to other managerial ranks. Korn Ferry’s data found that about 50% of organizations now include mid-level managers in their initiatives, while around 33% also include first-level managers. “Not only are companies recognizing the leadership potential of these managers, but they are also highlighting their commitment to developing talent in the early stages of their careers,” says Emily Gianunzio, Research Analyst at the Korn Ferry Institute.
This is crucial, as first- and mid-level managers bridge the gap between the top of the house and the rest of the company. These managers are key to implementing upper-level directives and translating them into useful guidance for staff, affecting an organization’s ability to execute their strategy effectively. By expanding their scope to more levels, companies are not only promoting inclusivity, but they are also creating a more robust pool of leadership talent ready to tackle challenges and chase opportunities, Gianunzio says.
Succession planning is a continually evolving field that requires a forward-thinking approach. Companies that align resources with strategic goals and apply a multifaceted strategy will strengthen their efforts and better prepare for future disruptions and uncertainty. “Succession planning is no longer just about maintaining the status quo,” Chighizola says. “It's about securing the organization's future.”