Are Leaders Smarter Than Dogs?: Executive Suite Succession Planning, Tom Casey

Tom Casey, Managing Principal of Discussion Partner Collaborative, spoke last year at the IACPR Global Conference 2011 on talent readiness – and the top ten human capital challenges of the new decade. He is an expert on the development of organizational transformation strategies for rapidly growing multinational or transitioning organizations, consulting in over 20 countries and virtually every economic sector. He focuses on working with companies to conceptualize and execute enterprise strategy, organization design, change management and innovative human capital initiatives; on creating strategically aligned leadership development initiatives; and on developing human capital initiatives around workforce planning, employee engagement, sourcing, globalization, mergers and acquisitions.

Here he addresses the dysfunctional approach so many companies take to succession planning and leadership development. 

Anyone who is from the US has heard the adage “the dog is barking up the wrong tree”?

The luckless dog is presuming that there is a cat in the tree, deserving of their attention.  Yet we humans in our infinite wisdom realize the cat is either long gone, or is quite happy mocking the dog from a different tree?

We could take the view that the dog is stupid, yet as it relates to Succession Planning are we leaders not representative of this hapless dog?

If we look at the numbers from various sources it is not a leap of logic to believe so:

·        35% of companies have a Succession Plan with “integrity”(SHRM)

·        78% of companies have some form of Succession Planning “strategy”(Corporate Leadership Council)

·        50%+ of the Fortune 500 Board Directors for the Fortune 500 are “unhappy” with their companies Succession Plan(HBR November2011)

·        Average tenure of a Fortune 500 CEO is approximately 3.5 years(HBR November 2011)

·        Age 65 is usual and customary age for “executive retirement” directly contradicted by DPC research that indicates the age is more likely to be 62 “after a phase down period”(December 2012 Study The Art of Executive Boomer Management)

At a recent Discussion Partner’s strategy session like the dog who wanders away from the tree feeling embarrassment, we felt that we as consultants  needed to acknowledge “Succession Planning is a dysfunctional process the outcome of which is to provide little to no value to the enterprise.”

Yet metaphorically the cat was not imaginary and enterprises do need a replenishment process to promote sustainability.

Discussion Partners conducted an internal audit of our client experience on Leadership Succession since the firm was founded in 2007.

Our overarching conclusion was the fatal flaw is Succession Plans are too internally focused by limiting the question to “who do we have and when will they be ready”?

DPC suggests a modification of a Null Hypothesis (the process for challenging assumptions/strongly held beliefs by attempting to disprove) is more appropriate.

For example in the movie Moneyball the focus on On- Base Percentage vs. Individual Statistics was the null hypothesis theme expanding the analysis of proficiency beyond batting average.

This approach led the Boston Red Sox to 2 World Series Championships in the past decade after approximately 90 years of frustration (yes a number of DPC Principals live in Greater Boston).

DPC has begun promoting a new approach, Continuity Planning loosely defined as promoting enterprise growth through ongoing replenishment for critical roles accessing both internal and external labor market candidates. 

The key words in the above  are on-going, internal, external and critical!

Essentially our modality has the following steps:

1.      Identification of Mission Essential roles beyond those traditionally embodied in a Succession plan(for example Actuaries in and Insurance Company, Internal Controls in a Finance function)

2.      Identification of no more than 4 Critical Success factors for the aggressive development of high potential managers

3.      On-going “rack and stack” of managers for role suitability or ascension….focused initially on the question “are they the best the internal and external marketplace has to offer”

4.      Identification of external applicant sources inclusive of gathering competitive intelligence identifying suitable external candidates to “raid” if needed

5.      Creation of a Dashboard for quarterly updating regarding role identification, internal candidate status, and external labor market opportunities.

Discussion Partners perceives the benefits of this approach as having the following key elements:

1.      Broadening the discussion about internal readiness to encompass a broader dialogue on internal/external marketplace availability

2.      Ongoing vs. episodic review of leadership alignment with a broader number of roles essential to the enterprise

3.      Increasing the ability of the organization to be innovative in terms of role architecture, organization design, phase down of executives, through a broader definition of work to be accomplished and resources to accomplish same.

Our client experience to date using this new approach has been encouraging.  There is a possible added benefit according to one of my colleagues, “reduction of eye strain  reading  Succession Plans with the foreknowledge they are likely more fiction than fact.”