The spotlight on succession planning provides necessary reminders to leaders
“The best way forward is to pass the torch to a new generation.”
That’s what U.S. President Joe Biden said in his speech on July 24 as he ended his run for re-election. The move was followed by praise for Biden as he accepted that he may no longer be the best fit to run the country. His decision was described as selfless by the Democratic party.
In doing so, it reminded workplace leaders what it means to step down and why it’s important to have a succession plan in place. In fact, it’s provided many lessons C-suites can learn from his move, largely centered around leadership exit strategies that uphold the integrity of the workplace and the trust of employees.
We spoke with workplace leaders for a blueprint for succession planning.
How to know when it’s time to step down before it starts impacting the workplace
Jessica Bigazzi Foster, current CEO and former president of leadership consultancy RHR International, says that stepping down from a leadership role is rarely something that a person does alone.
“It’s a pretty rare and small group to do that,” said Bigazzi Foster. “When no one is saying to you it’s time to move on, to know in your own head and heart that you’ve reached your limit is very challenging. That’s a big ask of a human being.”
That means there is likely an ongoing conversation about succession planning, but a transition can be triggered by multiple different things like the macro environment, business performance, shifts in needs and demands of a company or a leader that has reached – and passed – their peak. Bigazzi Foster describes that often it might be hard for a CEO to know when it’s time to step down because, as she puts it, “the world of a CEO is an echo chamber,” where not many people challenge the top executive, which leaves them with a version of reality this is not holistic.
The most common reasons senior leaders step down from their roles
Bigazzi Foster said the most common reason is because a CEO’s lifecycle is over.
“You come into a role, inherit a set of opportunities and challenges, you make decisions, you oversee a series of results and outcomes, and at some point, you’ve really done what you can do in the role and you start to recognize the company needs something different than what you have to give,” said Bigazzi Foster.
If a CEO has the self-awareness to recognize this, it is the best-case scenario. However, there are instances where there are involuntary exits where a CEO might have made significant missteps, had a public callout of their bad behavior or a major event or crisis that forced investors or board members to getting involved.
Needless to say, a graceful exit is far better. “Those kinds of forced exits, no one wants that to be the way of an exit,” said Bigazzi Foster.
Strategies for assessing and choosing a successor that’s best for the company
When coming up with a succession plan, there is a lot that goes into it, including how to retain talent within the organization, instill trust among teams and mitigate business risk.
The number one thing, said Bigazzi Foster, is to not look for an identical replacement. Figure out where the company is going and hire for the needs of the next seven to 10 years. A big part of this is creating a leadership pipeline internally that ensures multiple candidates are prepared for leadership roles.
“Dig your well before you’re thirsty,” said Justin Hirsch, CEO of JobPlex and HR Practice Group Leader at DHR Global, an executive search and leadership consulting provider. “Be proactive, start to identify, speak to and develop talent. That allows the talent management team to identify these prospective candidates to be on succession plans.”
Ensuring retention during major company changes
As a part of the succession plan, companies can proactively prepare emerging mid-level leaders to support new CEOs and ensure stability during transitions. This will give employees the opportunity to be a part of the process.
Hirsch says that includes identifying prospective candidates early, and identifying who could be on the bench in the succession plan. Ideally it’s someone who goes above and beyond in their role, raising their hand for opportunities and really leans into their day-to-day work. These are people who are mid-level internal business partners who are adding value to their leaders already and have a seat at the table.
“It’s an intersection of a high IQ as well as a really strong EQ,” said Hirsch. “Succession planning management is not a gratuitous exercise. It’s an exercise on top talent, not just their pedigree but what they bring to the table, what are their relationships, how do they really engage leaders?”
With a change in CEOs, Bigazzi Foster said there will likely be natural attrition at the company, but it can be a positive in that it allows the CEO to make hires and develop clear plans on how the company will move forward. Hirsch echoed this, noticing that most people use this as a gut check on their own roles. And the change in leadership can be used as a time for companies to double down on retention efforts by providing or revisiting career paths.
“Top talent is no longer just waiting for their internal HR leaders, division managers and heads of talent management,” said Hirsch. “They’ve taken the bull by the horns and talk about what’s important to them about what’s going on in their careers. The trend is self-advocacy.”