Silver Linings to the COVID Cloud Part 6: Transforming Succession Planning

As the Director the Center for Executive Succession in the Darla Moore School of Business, I have enjoyed exploring how the COVID crisis has impacted succession in our partner organizations. In one of our recent partner zoom meetings we uncovered an interesting effect of the COVID crisis: transforming executive succession processes. 

To explain this transformation, I will try to use a few visuals that caricature the extremes of the different types of succession. For instance, the first figure below depicts a traditional approach to succession planning. Companies identify the key roles in the organization and then note the two or three individuals whose next promotion might be into each role. This allows HR to create development plans for each individual to help them gain the skills and experiences that will qualify them for their next role. Note that most often these plans largely focus on developing individuals within business units or functions. 

Parallel with the ongoing succession plans, firms also develop emergency succession plans. These plans identify THE person who will be tapped for a role if the incumbent quickly departs. The emergency successor may only temporarily fill the role until someone else fills it permanently, or they may move in from the emergency but stay much longer. Again, as illustrated in the following figure these plans tend to narrowly focus within business units or functions. 

While many (but not all) firms had emergency succession plans, he COVID crisis revealed the inadequacy of these plans. These plans work when one individual departs quickly but the rest remain. However, they do not work well if 25% or 50% or 75% of a level of the organization becomes incapacitated. To link it to the crisis, what happens if COVID spreads among the executive team to where a majority of them are hospitalized?  If so, emergency succession plans fall apart and create questions regarding the ability of the firm to continue operating without significant interruption. This forced the conversation from emergency succession planning to business continuity planning (BCP). As seen in the next example, BCP required exploring a broader set of talent options for the firm to move into a broader set of potential roles and simultaneously thinking about how to begin exposing and developing those individuals to take on roles neither they nor the organization had ever considered before.

Here is where the story gets interesting. Having done so, boards, CEOs, and CHROs began asking the question: If BCP suggests our talent can fill a broader set of roles than we had identified in the existing ongoing succession plan, why should we limit the roles we consider? And if we consider a broader set of roles, how do we broaden our approach to developing people? In other words, why shouldn’t succession planning more closely resemble and be linked to business continuity planning? 

This transformation has had three important effects:

1.     It has focused the board on the criticality of talent management. Boards increasingly recognize the importance of talent over the long-term, but only focus attention on the CEO succession talent pool, and many only once they know succession is coming soon. This crisis shifted their focus to the importance of talent in the present, particularly when a crisis hits. When faced with the potential for significant business disruption due to multiple executives becoming ill or incapacitated, suddenly talent rises to the top of the board’s radar. 

2.     It has taken off the succession blinders. Whereas past approaches may have defined roles and individuals with a relatively narrow set of knowledges, skills, and abilities (KSAs), BCP requires focusing on broader and more generalizable job specifications and talent identification. Things like ability to deliver results, develop followership, courage, problem solving, and learning may be more important to identifying individuals within succession plans than functional or business knowledge. 

3.     Develop talent to capabilities not profiles. One of the weaknesses of succession stems from attempting to develop people to succeed in the next position by focusing on the profile of that position. However, the crisis has pointed to the fact that profiles inadequately define the position and in a crisis the profile may have nothing to do with what it takes to succeed. Thus, firms can focus more on developing broad capabilities that individuals can use in a wide variety of positions rather than more specific skills believed to be required for a specific position or set of positions. 

As I said when I began this series, the COVID crisis has caused firms to begin to question the assumptions they have held. Clearly the crisis caused us to question our assumptions about what good talent and succession management look like. Going forward they will look quite different.