More than ever, succession is at the top of the priority list for many organisations. No matter how successful they are, most CEOs and directors know they must address this issue to prepare for any unexpected change at the top.
Well-prepared organisations tend to have solid succession plans and a list of talents and potential successors in place. Many listed firms have a nominating committee for this purpose.
But good intentions and a solid succession plan do not necessarily mean that everything will work out fine. Choosing the right successor is easier said than done. In order to do it right, leaders at the top of the pyramid need to adopt the right process from the very beginning. Below are the essentials.
1. General requirements for the position: The board should have on hand clear requirements and job descriptions for each key position they seek to fill. For example, if the board needs to find a successor to the chief sustainability officer (CSO), directors may consider an executive who is be able to communicate and coordinate effectively with the board and top executives, shareholders, customers and employees to address sustainability and everything that entails. This person will also need the ability to implement and monitor the progress of the corporate sustainability strategy.
2. Expected skills and knowledge: These should also be spelled out clearly. For a CSO, for example, the person should be good at active listening, critical thinking, complex problem-solving, decision making, reading comprehension, systems analysis, and so on.
3. Personality profile: Many people think that someone’s behaviour, which can be easily observed, is a good indicator of their personality. But it is much more complicated than that. Understanding and clearly knowing the personality of the candidate can help in predicting how they will behave when they move into a new role. Using the CSO as an example, the board may need to consider a potential successor who profiles well for the following personality traits: cooperation, initiative, integrity, leadership and persistence.
4. Personality and cognitive ability assessment: These two important assessments can help the board to understand and know a person in greater detail. Using a reliable assessment tool is essential. Getting the right assessment result can certainly help directors to choose the right people to guide the future of the firm.
After getting the result of the personality assessment, board members should take a closer look and compare it with the personality profile list outlined in Step 3. Seeing whether these match can also help directors reach the decision that is right for their organisation.
5. Individual feedback assessment: Besides feedback from direct supervisors of a candidate, boards should also solicit 360-degree behavioural feedback from the people around the potential successor. This type of feedback, if organised properly, can be one of the most powerful tools to help a board learn how someone really behaves and responds in the work environment.
Some firms may use 360-degree behavioural feedback as an indicator of talent and a potential successor. However, people’s behaviour changes over time. Hence, there is always debate about this approach. In my professional experience, I find the results of a personality and cognitive ability assessment to be a more reliable indicator of a potential successor. I will discuss this issue in a future article.
6. Face-to-face interview: Before the interview, directors should have all the above information in hand and study it thoroughly. Generally speaking, a personal interview is one of the most important steps in selecting a suitable successor. However, there are a few things to be addressed. First, some interviewers may not prepare and go through the interviewee’s information before the session. This greatly reduces the effectiveness of the interview.
Second, the interviewer should prepare for a behavioural interview in which observing a candidate’s body language will be a valuable part of the process. The interviewer should not use only gut feeling when asking questions or making a decision. Third, some may consider face-to-face interviews unnecessary when an online video chat is more convenient. But as we have learned over the past three years, when we watch someone on a screen there are many aspects of non-verbal communication that we miss.
7. Expert recommendations: Although the board is usually well-rounded and capable of reading and choosing people, recommendations from experts in specific fields are also necessary because they can provide strong reasons to support certain promising candidates over others. The head of HR and external consultants can help in this regard. The nominating committee should be the one making the recommendations, as defined by its role and duties.
8. Annual behavioural assessment and performance evaluation: Once you have settled on a particular executive to be a successor for a position, for example the CSO as discussed above, an annual 360-degree behavioural assessment should be conducted at the end of each year, about the same time as the performance evaluation. The result should be reported to the board so that it can monitor the successor and ensure that he or she is always ready to move into the top job when required.
The above eight steps can help the board to ensure that it has the right process and information to identify the right successors for the organisation. Some firms might not run through all eight action points but they should cover the activities described above in the best way they see fit. This way, the board will certainly be able to find the right people for critical management functions as expected by all stakeholders.
Sorayuth Vathanavisuth, PhD, is Principal and Executive Coach at the Center for Southeast Asia Leadership. His areas of interest are executive coaching, leadership development, succession planning and corporate culture. He can be reached at sorayuth@sealeadership.com
