Comprehensive Global Korn Ferry Study Shows Only One Third of Executives are Satisfied with Succession Management Outcomes
Los Angeles, CA. February 4, 2015
Key Findings Show Less than One-Quarter say they have a Solid Pipeline of “Ready Now” Candidates and Organizations are Over-Reliant on External Hires
LOS ANGELES, Feb. 4, 2015 – Korn Ferry (NYSE:KFY), a single source of leadership and talent consulting services, today unveiled results of a comprehensive, global executive study on succession management.
The study and corresponding report point to an alarming rate of dissatisfaction among senior leaders and executives, with only one-third of respondents (36 percent) saying they were satisfied or very satisfied with their company’s succession management programs, and less than one-quarter (23 percent) saying they have a solid pipeline of “ready now” candidates.
“Succession management programs often fail because they’re static,” said RJ Heckman, president of Korn Ferry’s Leadership and Talent Consulting business. “Programs must look beyond a snapshot in time of current talent and business needs to create an ongoing, systemic, yet agile succession management approach.”
The study also finds that more than three-quarters of executives (78 percent) say their organization’s succession management programs only include the title of “vice president” and above.
“There’s significant risk when succession management programs don’t go deep enough into an organization,” said Jim Peters, Korn Ferry lead for Global Succession Management. “I often say to CEOs: ‘There are several potential CEOs within your organization: you and many others at different levels in the leadership pipeline, with one being an individual contributor in Mumbai. Do you know who she is? And if you know who she is, what would you do to ensure that she would have the skills and capabilities to lead the enterprise 15 or 20 years from now?’”
The study points to missed opportunity and alienating potential successors as the most significant risks of succession management failure. It also shows that more than half of respondents feel their organizations are not addressing these risks.
According to Stu Crandell, Korn Ferry senior vice president of Global Offerings, a key to mitigating these issues is to ensure succession management is tightly integrated with other talent management initiatives.
“Unfortunately, many companies fail to align their talent programs. Employees may be on a succession chart, but those individuals have no relationship to high-potential programs,” said Crandell. “In that case, there are high-potentials who are being identified and may even be going through great development programs, but when it comes to promotions, other people— inside or out— get those positions.”
The study also shows that when looking at filling open leadership positions, most executives feel the right mix of “build” (develop within) versus “buy” (hire outside) should be 2:1. However, the majority still end up going outside more often than they would like to obtain the talent they need.
“The ideal mix of build vs. buy does depend on an organization’s business strategy and its maturity,” said Crandell. “For example, a startup company may have to rely more on buying talent. But no matter the strategy, when companies are over-reliant on external hires, it probably indicates a lack of self confidence in the succession management process and the fact that the program doesn’t go deep enough.”
About the Study
Commissioned by Korn Ferry, Hanover Research conducted a global survey in August/September 2014, that came from 54 countries across the globe, and from companies ranging in size from 500 employees to more than 50,000 employees. After the application of standard quality control measures, the survey generated a total of 1,009 responses from the C-suite (41 percent), VP/SVP/EVP (42 percent); Director (11 percent) and other (6 percent) leadership levels.
About Korn Ferry
At Korn Ferry, we design, build, attract, and ignite talent. Since our inception, clients have trusted us to help recruit world-class leadership. Today, we are a single source for leadership and talent consulting services to empower businesses and leaders to reach their goals. Our solutions range from executive recruitment and leadership development programs, to enterprise learning, succession planning, and recruitment process outsourcing (RPO). Visit www.kornferry.com for more information on Korn Ferry, and www.kornferryinstitute.com for thought leadership, intellectual property, and research.