Article in Society / Leadership / Organizational
In order for an organization of any size to be "sustainable" there needs to be in place a plan not only for the technology or "value" proposition, but for ongoing leadership. This is something we don't do well in this author's opinion. I offer my thoughts on our "flaws" and some considerations.
 
 
 

As a management consultant and former human resources executive the issue of staff development and “succession” has always fascinated me. I see it as an absolutely critical factor in the long term success of a business or organization of any kind. The interesting thing is that it has been a consideration for hundreds of years and I am not convinced we do much better than we did four hundred years ago. There are exceptions, but not many.

I see this as a particularly timely topic because once again the prospect of Steve Jobs' health and the effect on Apple is rearing its head again. You could argue that Jobs epitomizes “Apple” in a much more profound way than almost any other high profile CEO.

One of the greatest “myths” I encounter in my work is that the concept of succession is a “big” company issue. I actually see it in many ways as being even more critical to smaller organizations and entrepreneurial organizations than the “big guys”. My reasons-

  • Especially in start-ups the “founder” is the firm. They may be the creative genius; they may own the contacts, whatever. You take them out of the firm and the value goes with them
  • If you are seeking outside funding from “angels”, VC’s or even banks if they are smart they are looking at the depth of your management team. They want to see past the founder/owner. This is an investment for them not a long term relationship.
  • Businesses succeed or fail on the basis of relationships not systems. The importance of those relationships is more critical with a small firm. They do business with you, not your “firm”.
  • Most small firms do succession badly. In candor most organizations do it badly. The turnover rate for newly promoted/newly hired executives is over 40% in the first 18 months. Not an attractive statistic.

There are a lot of reasons we do succession badly, just a few of the common ones that come to my mind are-

  • The “mini-me” syndrome. That is where we see our “successor” as a “replicant”. They need to possess the same skills and attributes that we do. News flash, organizations and environments evolve. The operating environment and “markets” you participate in evolve with them. The skills of an entrepreneur and that of an executive are quite different.
  • The “immortality” syndrome. I simply refuse to die or retire, I am too important to the business. Planning your own departure from the business (and from this life) is tough, especially if you have built the business and separating you and it is damn near impossible.
  • The “one trick pony” syndrome. This is where there is a designated successor. Where I see this cause issues is; the successor leaves, the skills necessary evolve and they don’t, they stop developing because they are assured of their “ascension”, etc.
  • The “shallow profile” syndrome. This is our old friend management versus leadership and technical skills versus “soft skills”. I believe management and leadership are closely aligned, but different. I believe that “relationship” or soft skills also play a critical role in leading organizations.

So what do we do about it?

As you might suspect I have a number of recommendations.

  • Build a “succession” profile for each of your critical roles and build a robust profile. Include not only the technical and “business” skills, but also the relationship and relational skills. Think about what the demands are and what you suspect they will be.
  • Have a “cohort” if possible rather than an individual. I like to start at least two levels back from a person’s eventual “destination”. I don’t think promotions should be assumed. Even in smaller organizations I required people to demonstrate why they got to participate beyond basic management training. I watched their evolution.
  • Use your resources. There are a number of excellent resources out there available to businesses of all sizes including training offered through local community colleges, chambers of commerce, executive coaches, and formal and informal mentoring programs. Look at them as an investment not a cost.
  • Broaden your “candidate pool”. I hire on the basis of attributes more than “skills”. I look for characteristics like adaptability, intelligence, relationship building, and other leadership traits. Many times I can outsource technical skills for a period of time. I can teach smart people almost anything, I can’t teach people to be smart. I look at competitors and related businesses or organizations or businesses that are “vertical” to me. In financial services I looked to retail. Financial services are a commodity.
  • It takes a village. Don’t rely exclusively on your own judgment to assess candidates. Interviewing by itself without a profile and assessment has been demonstrated to be the least reliable predictor of success.
  • Test them. Large organizations have a definite advantage here, but there are things that small organizations can do using project teams, community activities, and related things where they can be tested without “crashing the boat”.
  • Send them to boarding school”. One approach that I really like is when a potential succession candidate does an”apprenticeship” with a larger organization. Law school doesn’t teach you to be a lawyer; physicians are required to complete a residency. Smaller firms and/or family owned businesses that send people “away” to get the benefit of the training and resources of larger organizations usually gain from it.

The interesting thing is that there are some great historical and even current models of what I am describing. Before automation and “professional management” people were groomed. In many countries the “heir” was sent away to be tested and trained beyond their father’s court. It served a number of purposes.

  • They got “tested” in a more objective environment.
  • The emotional dynamics of filial relationships weren’t in play.
  • It prevented or at least limited “fratricide” or politics for succession.

Another model I am a fan of is the military. We can criticize the military, but in reality being a member of the officer corps of the military means that exposure to leadership and management techniques is not an “elective”. Every serving officer goes through leadership training without exception. Advanced training is selective, they also don’t provide for “shelving”. Officers who are deemed to have limited advancement potential are usually counseled out. You don’t typically see “career” lieutenants, captains, and majors. They also tend to move them around and test them in multiple environments rather than leave them in one place.

We also see corporations including General Electric, PepsiCo, Honeywell, Intel and others that have incorporated rotation and development into their talent and human capacity management strategy. They “get” that technical skills only go so far.

This will probably make me unpopular with more than a few, but don’t assume that an MBA makes someone a leader or manager or that a CPA or certification provides the breadth and depth of skills to occupy a leadership role. Most of those offer conceptual skills. Look for a combination of conceptual and application and the candidate’s ability to articulate it.

I have seen organizations “requiring” a Master’s or an MBA to be a candidate for a management role. I see that as gross oversimplification. I want to know what they have learned and more importantly their ability to apply it.

I have a colleague who occupied a very senior executive position with a Fortune 50 organization. He never graduated from college. I always enjoyed his comment, “I have a deep appreciation for MBA’s and PhD’s, some of the smartest people who worked for me have one or more…”

I am not saying discard them, I am saying don’t accept them as rote.

For those that know me I am a student of history and legend. I absolutely loved and recommend to you the Jack Whyte Camulod series of novels. It charts a four generation plan to develop a king that in legend we know as Arthur and the steps and strategy that produced him.

In addition to an interesting study in human nature they also explore responding to a shifting political/religious/economic climate and even the evolution of warfare and technology. It is a fascinating read.

I sincerely believe that the skills that lead us through the next generation and beyond are going to be relational not technological. Technology will always play a critical role as a tool, but we have significant challenges ahead of us dealing with trust, the alignment of individual and organizational values, and even a redefinition of “profit” and “capitalism”.

The lack of engagement and level of employee dissatisfaction coupled with economic uncertainty has connections to everything from productivity and profitability to the costs and implications of delivering health care. Somewhere between 70 and 80% of the workforce describes itself as neutrally or unengaged in their work. Some describe this as the biggest challenge and opportunity we face in this new decade. I would count myself among them.

We need the right people in the right roles doing the right things….

 
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About the Author 

Mark Herbert
Mark is a Principal in the management consulting firm, New Paradigms LLC. His background includes over thirty years of combined C level exe

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