The secret of high-level succession

Don Hewitt, founder of the revolutionary "Sixty Minutes" news magazine, was in his late eighties when he heard the recurring stopwatch in the show's overture. Tick tock, but there is no feeling of ageing at all. The CBS executive producer, who once declared that he was going to "give it all", has engaged in a tug-of-war with the company's top executives over his successor. Earlier, he reluctantly agreed to pass his throne to Jeff Fager in 2004. In exchange for a fixed departure date, Hewitt received a company-provided contract that he would be the executive producer of the new project and "suggest" his successor in another position. And that's probably where he ends up giving way.

Colgate-Palmolive CEO Reuben Mark was arrested for his efforts to push Citigroup's 70-year-old CEO Sandy Weill into a succession plan Corporate Library, an authoritative corporate governance research organization, awarded the title of "Most Dedicated Leader". While the rest of the group's board acquiesced to Weir's stubbornness, Mark was so annoyed by Weir's refusal to plan a successor that he insisted on resigning as a director and ultimately refused to seek re-election.

Why is succession planning so difficult? Why on earth would a talented and experienced leader be reluctant to properly nurture multi-talented people to continue and grow his career? How should managers ensure a smooth transition of power at the top?

The Pain of Succession Planning

Outgoing CEOs often sabotage their succession plans for their own benefit, making deals to make their retirement even better. Brian Schwartz, owner of the consulting firm Talent Management Team, gave an example of his own experience. A CEO who had worked with Schwartz passed the company on to someone Schwartz distrusted. "I was the chief human resources consultant and advised him to take his life back," Schwartz said. But the CEO, eager for the windfall he had planned for himself, rejected the suggestion. Schwartz went on to say that his successor slaughtered the company for three years until "he was fired for false accounting."

In the worst case, the company's lack of a competent commander-in-chief can lead to chaos in the company. More often, a leader elected in a desperate situation is not necessarily the right person, and the company goes downhill as it descends into chaos. When employees feel that the company's direction is inconsistent and that personnel promotions are arbitrary, morale is low, personnel turnover is high, defections to competitors skyrocket, and the cost of maintaining operations skyrockets. With new bosses likely to jump ship within a few years, the company's goals and strategies become increasingly unstable, and its competitiveness declines.

Companies without succession plans are "fragile companies," said Chris Pierce-Cooke, executive vice president and global executive director of consulting firm Right Management Consultants. "They've lost intellectual capital, and that capital has gone with the leavers. The company has lost its attractiveness, its drive, its productivity, its morale, and its ability to serve its customers."

There are a number of reasons why some leaders hold positions of power. But their refusal to say "good night" with grace could lead to a tragedy akin to the ancient Greeks, where rulers who love their kingdom try to take it for themselves by destroying it.

"Some people are so obsessed with their role in the company that it's their only source of identity, friends and family." Elaine Sloan, senior vice president of PDI (Personnel Decisions International), a consulting firm (Elaine Sloan) said. He notes that leaders who have yet to diversify their lives to include roles outside of work hold the tightest grip on their thrones, "who are fond of airing, flattery and grandstanding." The good things that once paved the way for leaders—such as gritty personalities, boundless self-confidence, and a voracious appetite for control—become shortcomings as their careers come to an end.

Successor Airborne and Lineage

Schwartz of Talent Management Team notes that scouting for a leader who won't come in handy for at least a year is like "hitting a moving target." While CEOs always have the urge to "clone" themselves, companies "need different leaders at different times. At some point you may need a leader who acts as a reinforcer and stabilizer, and at another situation, you may need a leader with a vision." But the market environment is changing rapidly, and it is often difficult to foresee specific needs.

Pamela Stepp, executive director of Cornell University's Center for Human Resource Studies, observes that even companies that go to great lengths to develop their people don't use quantitative metrics to measure the success or failure of their leaders' programs . And, while CEOs increasingly dictate the length of their tenures, many are reluctant to give up their jobs because they can't afford to retire from the comforts of their dream jobs.

Waiting passively until the company collapses, only to find out that there is not a suitable leader within the company, is very familiar with the company's culture, and is ready to achieve the company's goals, then it can be costly, and this can be very costly for the people in charge of human resources. It's a nightmare for top managers. William C. Byham, co-author of Grow Your Own Leaders and president and CEO of DDI (Development Dimensions International), a consulting firm, said: "We There is good research that shows that 50% of top managers hired from outside the company are ineffective, and conversely, 65% of those promoted from within are successful.”

Now, more and more of companies go outside to look for leaders, often because the board wants the company to turn in a new direction, hope that the "airborne" magical manager can once again create a miracle to turn the company's unfavorable situation, or just think that the "airborne" who has never met People who cultivate themselves are more attractive.

Casting a national net for leadership talent, while expensive, is sometimes necessary. Roger Conway, director of the Center for Creative Leadership's Leadership at the Peak course, thinks don't be sad if your spending goes to waste. If the talent you need isn't found nationally, "then the best candidate you have on hand is arguably the best candidate on the market," he said. If your succession plan is comprehensive and your candidates are properly developed, "then your company should be developing better candidates."

PDI's Sloan argues that poor quality A successful succession management effort can wreak havoc on a company-wide effort to retain talent. If the promotion process is fair and employee development is reasonable and adequate, "then people will stay," and instead, employees become what Sloan calls "POPOS (the company's scorned nobodies)." And a large company where DDI's Byham once worked boasted a succession-planning process but found that it produced almost zero top managers. Apparently, "they used other subjective criteria". Personnel promotion that is not based on collected data will inevitably dampen morale, harm good employees, and eventually lead to the exodus of talents.

Experts unanimously claim that effective succession planning is built on several areas, including a good, thorough people assessment (many prefer a 360-degree approach), leadership through education, Assign different jobs (test managers' performance through different jobs) and well-designed mentoring and coaching programs. The process should also be fair, transparent, and publicly disclosed to all levels of the company.

However, few companies seem to be able to integrate all of these aspects in a comprehensive, visionary way that requires buy-in from the top of the company. Some managers have withdrawn from the job of developing successors because the idea that recommending a successor might expedite their own departure. What's more striking is that even when management already has candidates in mind to fill high-level vacancies, these candidates are often kept in the dark, unaware that they have been labeled as having high-level leadership potential. In a 2000 survey of 150 companies around the world, Byham found that "50% of the companies didn't tell the people they were looking for that they were already. I think that's stupid."

Family Succession Grievances Qiu

The series of succession issues in family companies is particularly complex. Its bosses must be confident that the people assigned to take over the company are ready and need to ensure their own financial security. Jeff Galant, tax and estate planning partner at Goodkind Labaton Rudoff & Sucharow, a law firm that specializes in family businesses, recalls: “We were in a situation where our son Nearing 50, running the company and building new brilliance.” Father owns most of the shares, but refuses to retire until he gets “fair value” for it. Establishing so-called "fair value" requires not only a creative tax plan, but also an outside mediator, Gallant said, because the son believes that the father has been compensated handsomely by taking large sums of money from the company. enough to support its luxurious lifestyle.

Choosing among the many children competing for top jobs can spark all sorts of "favorite" hatreds among siblings, which can lead to estrangement and even court battles. "They're afraid to deal with these problems, they don't want to bring up old problems," Gallant said. "We're increasingly working with family business advisors with degrees in organizational behavior, as well as investment banks, to form an interdisciplinary team to help The family business survives such a reorganization.” If the leader is too passionate about running things and reluctant to leave, putting him in charge of the family business foundation or charity usually works.

The Law of Natural Elimination of Succession

A good succession plan goes beyond simply assigning a prince to the throne, lawyers and advisers believe. It also needs to compile a roster of all candidates for all key positions, not unlike what the military does. Fully developing successors for senior positions benefits everyone, companies can ensure that they have ready talent from within when they need them, and employees are equally happy as they grow, expand their skills, and enrich their resumes.

"You grab their heart, and you grab their man," says Scott Behson, associate professor of management at Fairleigh Dickinson University's Silberman School of Business. Companies can ensure that the investment in talent development is worthwhile by developing policies, for example, if an employee agrees to work with the company for at least three years after earning an MBA degree, the company can subsidize the cost of his/her participation in such a degree study.

According to Galant, a fair and transparent plan is not difficult if the executives of the company develop and implement the plan themselves. He advises companies to "set the bar early" and to be clear about the degree and work experience expected of future leaders. If there are multiple qualified contenders for a throne, an impartial panel of experts is assigned to participate in the entire selection process.

Kodak is taking some interesting steps to make its leader development process public and to allay the concerns of women and employees of color, who often feel deprived of promotion opportunities. The company's Center for Leadership Assessment and Development began an open, four-level program for anyone who wants to be considered a manager by the company. The program attracted more than 1,000 potential leaders. After finishing the introductory course, about 25% of the participants decided to quit on their own when confronted with the question "Do you really want to be a leader", and another 25% gave up in the second phase, which was instructed on how to perform Management responsibilities such as budgeting, staffing and production.

It follows that, even if all employees want to work in a fair place, not everyone wants to occupy important positions. What's more, in an uncertain business environment, being at the top of a company is not only lonely but precarious.

Original text reproduced with permission from the August 2003 issue of Workforce Magazine, Copyright 2003 by Crain Communications, Inc. Translated by Zhang Ping.

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The American Health Care Company Experience: Clear Principles

You never know when you will encounter a sudden or large number of vacancies in a management position. That's why planning ahead is wise.

WellPoint, one of the largest health care companies in the United States, believes that a good succession plan consists of the following four principles:

Deep planning. Some companies only develop successors for the obvious high-level positions, while ignoring the lower-level positions that carry out day-to-day business. WellPoint has developed a program that divides top management positions into five levels while helping the company deal with the multiple turnover of lower-level personnel that often occurs when top management positions are filled from within.

Pursue integrated synergies for succession planning. Integrating succession planning with other HR functions and initiatives can make this package even more useful. WellPoint integrates succession planning with an employee evaluation process. As a result, succession planning obtains more detailed data on internal candidates. At the same time, the employee evaluation process has also been improved across the board, and it is now more focused on identifying and developing people with potential for advancement within the company.

Market succession planning to potential candidates and their bosses. Since succession planning relies heavily on the quality of data collected from candidates and their supervisors, it is critical that they both understand what the plan means and how it works.

Adds another dimension to the assessment. A traditional 360-degree assessment is fine, but for succession planning, it makes sense to go a step further. WellPoint has set up "challenge meetings," in which one supervisor reviews another supervisor's assessment of their employees within a group to catch potential candidates for promotion that might be overlooked or underestimated by their immediate supervisors.

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The Bank of America Experience: A Hands-On Hand

Brian Fishel, Senior Vice President, Recruitment and Development, Bank of America, on the subject of this interview Not enthusiastic, but he finally admits that, yes, he does have some candidates to replace CEO Ken Lewis, just in case.

"The board has the final say," Fisher said. Yet he has a number of candidates on the line to replace not just Lewis but any or all of the departing senior executives. "Our theory is that the deeper the candidate's 'bench', the better."

Fisher has such a pool of candidates because it is Lewis who is driving the work. He has two-hour meetings with all senior managers for talent and organizational assessments and succession planning. It was Lewis who tirelessly drove the discussion and execution of the succession plan.

Because the bank has a very methodical, rigorous approach to what it calls "talent planning," which ties compensation to performance, candidates stand out naturally, Fisher said. In a leadership model similar to GE, the bank continuously evaluates candidates and adjusts them based on how well they achieve stated goals.

He admits that top HR executives cannot plan for succession without support from key company leaders. But HR folks also have to come up with something top managers shouldn't overlook: a deep analysis of the company's financials, goals, and growth plans that can help them come up with ideal solutions.

He said that when facing the top of the company, "you'd better have an objective understanding of your numbers, the drivers and levers of the company's business development, and be convincing. A good personnel worker must perform well. The role of a partner should anticipate the needs of the company's top management and provide possible options."

However, however, how do you communicate succession planning with senior management? In the minds of these top leaders, who may think they are forever young, the topic of succession planning may seem out of place to them.

"I personally wouldn't think of asking a leader the 'what if you're not here' question," Fisher said. Instead, he initiated discussions about which subordinates might be candidates for cross-training, scheduling new job assignments or possible promotion. He also advises candidates to start with subordinate positions in the role they are replacing, "and then bring them into the conversation" to ask for feedback. Once credibility is established, the topic of the leader's own position may come naturally, he said.

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