Surprises happen in business, and board level talent loss surprises have the biggest impact on organisational success. There are plenty of examples of abrupt C-Suite firings and resignations, such as the Global Chairman of Saatchi & Saatchi in 2016 who made controversial comments in an interview, or Deutsche Bahn’s CEO who resigned unexpectedly earlier this year. Rachel Matthews – Bray Leino Learning.
This means a crucial board position left empty, which can result in a drop of share prices, organisational upheaval and stakeholder concern. And despite the fact that you may have a second in command, it doesn’t mean that they are ready or even willing to take the helm.
Whether or not you are a blue-chip organisation, these surprises can hugely affect organisational performance. In fact, smaller organisations could experience an even greater impact from an unexpected C-Suite exit.
But what can HR do to prevent such a detrimental impact on organisational success?
Most organisations will have some kind of succession plan in place, even if it’s simply an idea of who could step up in the future. However, being unprepared for the ticking time bomb of unexpected C-Suite exits is something HR needs to communicate effectively to the board. But securing buy-in is often easier said than done.
Convincing your board of the importance of future-proofing
Most board decisions come down to financials. How will strategic decisions, or lack of them, affect the bottom line? This is where HR needs to make their case. Start by thinking about the cost of recruiting such a position. Not the salary, but the actual recruitment costs. Add to that the downtime without a filled position, and the time from hire to the individual being at optimum performance. These costs quickly add up. Next, pit these costs against the cost of talent building within the organisation. Developing the right individuals early will cost considerably less than undertaking a hurried recruitment process for an such an imperative role. Undertaking the HR 9 box grid for each of the different parts of the business will be crucial to the success of gaining board buy-in. This will identify the likelihood of people leaving and the risk to the business. Ultimately, this will demonstrate areas of vulnerability to the board and potential areas of urgency. Team this with the financials, and a strong plan, you’ll have a solid business case to present.
Planning for success-ion
Remember the saying, knowledge is power. The more knowledge you have, the more power you will have to effectively implement your plan at strategic level. Once you have used the matrix to identify who is at risk of leaving the organisation, and the risk to the business if they do, you need to look at your talent pool. Most senior managers and directors have a second in command, even if this has occurred organically, but would these be the ideal people to fill the role? There are a number of factors that can contribute to this, and many will depend on your organisational structure and culture, but consider where they are now and where they aspire to be. There is no value in developing an individual who does not aspire to seniority within your organisation.
Once all of these factors have been considered, it’s time to start succession planning and identifying areas of development for your selected individuals. Bear in mind that this won’t just include on the job skills and development, but areas such as financials, strategic decision making and people management. There are many skills that can be forgotten in succession planning, but to ensure a smooth and timely transfer period as and when the need arises, some of these key skills will make a big difference.
What if succession planning isn’t an option?
There will be organisations that aren’t in a position to succession plan. Perhaps the talent pool doesn’t allow it, or the board aren’t bought into the idea. If you can’t start implementing succession planning, or the development period will take a considerable amount of time, then it’s important to contingency plan. Remember that these things do happen – often. And while it’s easy for organisations to think that it won’t happen to them (and sometimes the board don’t like to admit that it might), it could happen at any time. The problem for HR is that when it does happen, they will be required to resolve the problem. Having appropriate contingency plans in place for this will lessen the blow when the time comes.