Leadership Succession Risks and What HR Can Do About Them

 

Roy Maurer By Roy Maurer March 22, 2020
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​One-third of HR leaders say they are challenged to develop effective senior leaders, and nearly half struggle to develop effective midlevel leaders, according to recent research from Gartner.

Sari Wilde, managing vice president at Gartner, discussed with SHRM Online the implications of these findings, which succession risks are most prevalent and what employers can do to reduce them.

[SHRM members-only toolkit: Developing Organizational Leaders]

SHRM Online: Why is leadership succession so difficult?

Wilde: HR is unsure about what leaders need today to be successful, and a lot of times, organizations are changing so fast due to uncertainty that by the time one cohort of leaders goes through a development program, the needs have changed, and senior leadership wants something different, or the business may be going in a different direction. There's a lot of uncertainty. There's a confidence crisis, both from an HR perspective, in not knowing what they need to develop leaders, and also from leaders themselves, in not knowing what they need to be successful in the future.

SHRM Online: What are the most critical succession risks you've identified?

Wilde: Vacancies cause time-critical leadership responsibilities to be neglected. That's the succession risk most people think about—open positions leaving critical gaps and key leadership needs unfilled. A lot of organizations feel that they don't have the perfect successor for the role, and so they leave it unfilled for longer than they should.

Another risk is underdeveloped successors—not providing the right kinds of experiences and development opportunities for your emerging leaders to get them ready for leadership roles, which could pose a big risk by the time you need them to be ready to fill those roles.

Static planning is another one. Creating succession planning based on existing roles misses the mark on future business needs. A lot of employers think about replacement planning for expected vacancies, but they should think about not only what leaders do today, but how that may change in the future, and [they should be] planning succession management around that, as well.

There's conformity risk, or the bias that happens in a lot of succession processes. A common way to nominate successors is by senior leaders sitting in a room and naming people who they think would be great for the roles. And oftentimes they choose people who are just like them.  This can create a homogeneous pipeline and damage company culture and performance.

Finally, there's culture-process misalignment. Companies must ensure that the succession management process aligns with the culture being promoted in the organization. If you're a company that really values transparency, the failure to provide transparency around succession management disengages employees. If your culture promotes risk taking but all of your succession management is exemplified by safe bets, what message does that send to your workforce? How you choose your leaders aligns with how you want people to see your company.

SHRM Online: How can HR address these risks?

Wilde: To guard against vacancy risk, we recommend practicing complementary leadership. It comes from the idea that leaders are under a lot of pressure, leadership skills are changing, and organizations don't have the perfect successors to fill roles. We've found that some of the more progressive companies are taking a complementary approach, essentially pairing a leader who has some of the skills, capabilities and background they're looking for with a partner based on complementary skill sets. Working together, they form the leader needed to run that particular business.

We worked with a company that was launching a new business line that required a lot of technical knowledge. They had an idea of who they wanted to lead the business, but the person didn't have all the technical knowledge, so they created a structure where they paired that person with another person with technical skills to co-lead. The company then made sure that the new team had everything it needed to be successful. It's OK to understand that the "purple unicorn" leader may not exist and then create an environment that supports complementary leadership.

If static planning is your challenge, look at current roles and come up with scenario projections. The senior leadership team, senior business leaders and HR can think about what changes in direction for the business would mean for leadership roles and how developing high-potential talent would change. Think about how you can make sure emerging leaders are getting the experiences they need to fill future known needs, but also needs that haven't been identified yet.

Conformity risk is a tough one. One strategy is identifying an objective observer who sits in on succession planning and is tasked with calling out bias. Anytime that they recognize that someone in the process is not taking an objective approach to the succession conversation, their job is to call them out on it.

Technology can certainly help. There are other organizations that are using AI [artificial intelligence] technologies to take the human out of the process of identifying leadership qualities, but of course AI can have bias baked in, as well. Think about practicing inclusive leadership. That means ensuring that inclusiveness is not just an add-on to leadership development, like having a bias-prevention class, but is embedded into the DNA of leadership competencies.

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