News Spotlight

The looming elder care crisis impacts employers. More companies are supporting workers who are also caregivers for parents, in-laws, spouses, partners, and siblings (MarketWatch).

Commute times are getting longer. Commute times of one hour are more common because the rising housing costs have forced workers to move further away from cities (Wall Street Journal).

Student loan debt prevents retirement. Older workers are having trouble retiring because they are still carrying student loan debt (CNBC).

Stat of the Week

86% of Gen Z and 89% of Millennials say that purpose is key to their workplace satisfaction and well-being, and 50% of Gen Z and 43% of Millennials are willing to turn down assignments based on their personal ethics or beliefs, reports a new study.​

These generations prioritize purpose in their work because they seek meaningful and fulfilling careers that align with their personal values and ethical beliefs. These generations view work as an extension of their identity and strive for roles that contribute positively to society and reflect their commitment to causes such as social justice, environmental sustainability, and ethical business practices. As a result, they are more likely to turn down assignments or job offers that conflict with their values, emphasizing the importance of purpose and ethical alignment for their overall workplace satisfaction and well-being. This focus on purpose-driven work underscores their desire to make a tangible impact and find deeper significance in their professional lives.

Deep Dive Article

How to Develop a Robust Succession Plan for Your Organization

Succession planning can no longer be an afterthought, with an average of 11,000 Americans turning retirement age each day this year. By 2031, the Census Bureau estimates that the U.S. population over 65 will reach 75 million, with more than 75 million Baby Boomers expected to retire. And over 90% of younger workers report that working at a company with a clear succession plan would improve their levels of engagement. Organizations must prioritize succession planning to stay ahead of these demographic shifts and preferences.

CEO turnover has been unusually high over the past year due to a combination of factors stemming from the volatile business landscape and rapidly shifting societal pressures. The COVID-19 pandemic disrupted operations and supply chains, forcing many companies to pivot their strategies and adapt to new market conditions. This put immense pressure on CEOs to steer their organizations through unprecedented challenges, leading to increased scrutiny from boards and stakeholders. More than 1,400 CEOs left their jobs last year, which is up almost half from the same period in 2022 and the biggest turnover in the past 20 years. Many of these CEOs had been in their roles longer than expected and were burned out coming out of the pandemic.

No matter the size or industry of your organization, having a solid succession plan in place is crucial for long-term stability and success. A well-designed succession plan prepares your company for inevitable future leadership transitions by identifying and developing talented employees who can potentially step into key roles. Without a clear roadmap for filling critical positions, your organization runs the risk of leadership gaps, disruptions in operations, and loss of institutional knowledge.

Many companies tend to put off succession planning to their own detriment. They may struggle with identifying and developing high-potential talent, or may resist the idea of change and disruption that comes with leadership transitions. It can also hinder the organization's ability to adapt to changing business needs and remain competitive in the long run.

By having strong capable leaders, you can avoid all these potential organizational issues. Leadership development is the most critical aspect of succession planning because it equips them with the necessary skills, knowledge and experience to step into key roles. That's why organizations are turning to ExecOnline's leadership development and executive coaching solutions, offered in partnership with leading business schools like Wharton, Berkeley, Columbia, and more.

Ten steps to developing a succession plan

Developing a robust succession plan requires a strategic and proactive approach. It's an ongoing process that should be revisited and updated regularly to account for changes within your workforce and business environment. Here's a comprehensive guide on how to create an effective succession plan for your organization.

1. Identify Critical Roles

The first step is to determine which positions are most vital to the functioning and success of your organization. These are typically senior leadership roles, specialized roles that require extensive training or experience, and roles that directly impact revenue generation, operations, or strategic direction. Conduct a thorough analysis to pinpoint these critical roles and prioritize them based on factors such as the potential impact of a vacancy, the difficulty of replacement, and the lead time required to develop a successor.

2. Assess Current Talent

Once you've identified the key roles, assess your current talent pool to determine if you have potential successors within your organization. This involves evaluating employees' skills, competencies, performance, leadership potential, and career aspirations. Consider factors such as educational background, work experience, track record of success, and alignment with your organization's values and culture. GE uses its “Session C process”, a comprehensive talent review and development process that assesses the readiness and potential of current employees for future leadership roles. This process includes performance evaluations, leadership potential assessments, and detailed succession planning discussions.

3. Develop Competency Models

For each critical role, create a competency model that outlines the specific knowledge, skills, abilities, and personal attributes required for effective performance. These models serve as a benchmark for assessing potential successors and identifying areas for development. Involve current role-holders, managers, and subject matter experts in defining these competency models to ensure accuracy and relevance. IBM's competency model focuses on leadership, innovation, and client relations. The company uses these models to identify and develop future leaders through targeted training, mentoring, and career development programs.

4. Identify Gaps and Potential Successors

Compare your current talent pool against the competency models to identify potential successors and any gaps that need to be addressed. This process may reveal that you have ready-now successors, high-potential employees who need further development, or a lack of suitable internal candidates for certain roles. Documenting these gaps and potential successors will inform your development and recruitment strategies. Unilever conducts annual talent reviews and succession planning sessions to assess the readiness of potential successors and identify any gaps that need to be addressed through development programs or external hiring.

5. Create Development Plans

For those employees identified as potential successors, develop individualized development plans to prepare them for future leadership roles. These plans should address any competency gaps and include a combination of on-the-job training, mentoring, coaching, job rotations, stretch assignments, and formal training programs. Ensure that development plans are aligned with the organization's strategic goals and provide opportunities for successors to gain relevant experience and exposure. P&G’s leadership development programs include global assignments, mentoring, and executive education to ensure a steady pipeline of well-prepared leaders. Solutions like ExecOnline offer coach-delivered project feedback with actionable advice so leaders can execute their development plans.

6. Implement Retention Strategies

Retaining your high-potential employees is essential for the success of your succession plan. Implement strategies to engage and motivate these individuals, such as offering competitive compensation and benefits packages, providing opportunities for career advancement, fostering a positive work culture, and recognizing and rewarding their contributions. For example, Cisco offers retention incentives such as competitive compensation, employee stock purchase plans, and robust training and development programs to retain top talent and potential successors.

7. Foster Knowledge Transfer

Facilitate the transfer of institutional knowledge and expertise from current leaders to potential successors. This can be achieved through mentoring programs, job shadowing opportunities, and knowledge-sharing initiatives. Encourage open communication and collaboration between current role-holders and their potential successors to ensure a smooth transition when the time comes. At Pfizer, the company has implemented a knowledge transfer program that pairs experienced leaders with high-potential employees. This program includes formal mentoring sessions, job shadowing opportunities, and collaborative projects to ensure the transfer of institutional knowledge and expertise.

8. Communicate and Promote Transparency

Effective communication and transparency are essential for building trust and buy-in from employees regarding your succession planning efforts. Clearly communicate the process, objectives, and criteria for succession planning to your workforce. Foster an open and supportive environment where employees feel comfortable discussing their career aspirations and potential for advancement. For example, Accenture promotes transparency in its succession planning process by regularly communicating the plan's objectives, criteria, and development opportunities to its employees.

9. Monitor and Adjust

Succession planning is an ongoing process that requires regular monitoring and adjustment. Periodically review and update your succession plan to account for changes in your organization's strategy, workforce dynamics, and business environment. Continuously assess the progress and readiness of potential successors and adjust their development plans as needed. ExecOnline, for example, offers insights and reporting that help companies quantify the personal and enterprise impact of leadership development programs and identify areas for future growth.

10. Align with Diversity and Inclusion Initiatives

Ensure that your succession planning efforts align with your organization's diversity and inclusion initiatives. Proactively identify and develop talented individuals from diverse backgrounds, perspectives, and experiences. A diverse leadership pipeline can foster innovation, better decision-making, and a more inclusive organizational culture. For example, Coca-Cola has made diversity and inclusion a key priority in its succession planning efforts, actively identifying and developing talented individuals from underrepresented groups.

Developing a robust succession plan is a complex undertaking that requires commitment, resources, and a long-term perspective. But the effort is well worth it, as it ensures business continuity, preserves institutional knowledge, and positions your organization for sustained success. By following these steps, you can create a comprehensive succession plan that cultivates leadership talent, mitigates risks, and supports the strategic goals of your organization.

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