Towards the end of last year, Coca-Cola appointed company veteran Brian Smith as its new chief operating officer (COO). After joining the company as Latin America group manager for mergers and acquisitions in 1997, Smith spent over 20 years moving up through the business and performing roles ranging from executive assistant to the COO to president of The Europe, Middle East and Africa Group, a position he held from 2012.
Smith is a fantastic example of internal talent successfully climbing the ranks, but his promotion provides us all with a prompt to think about the importance of succession planning.
It can be challenging when a senior team member is moved into a new position. If, like Smith, they have been performing a role for some time, such change has the potential to be very disruptive. It is at times like these when having a strong succession plan is absolutely vital to ensure the impact on the business, the team, customers and other stakeholders, is kept to a minimum.
But our research carried out among 127 senior directors in UK companies reveals that, in that country at least, as many as 46% of employers have no succession plan in place at all – and of those that do, most are incomplete.
In fact, the study found that even those that do have plans generally overlook some roles entirely. For instance, only 19% took the chairman into account, 20% the IT director, 33% the marketing director and 35% the HR director.
So here are five key considerations that it is important to bear in mind when devising a succession plan:
- Do not overlook junior team members
A good succession plan must go deep. While it may be tempting to focus purely on senior roles, by doing so you risk overlooking the great talent that may be sitting lower down the ranks – but they matter too. After all, if someone is promoted into a more senior role, they will, in turn, be vacating a position. So, to be as effective as possible, a succession plan should take a long-term perspective, identifying who could fill any gaps now, in a year or even in five years’ time.
- Provide training and development
The process of pulling together a detailed succession plan should prompt you to consider any training and development that may be required to fill any potential skills gaps among team members.
As you start to identify personnel who have the potential to fill top positions in the team and, in turn, evaluate the roles beneath them, you will naturally recognise potential gaps that could arise as a result of progression. Some positions will need to be recruited for externally, but it will be possible to fill others internally, given the right staff training and development.
Training is often as simple as sending employees on a relevant course, but development is a longer, ongoing process. It requires employers to provide individuals with the right experience, which is specifically tailored to their requirements in line with the goals they are trying to achieve.
- Consider hiring externally
It is important not to rule out the possibility of hiring externally. While there is much merit in developing internal talent, it is not always the ideal solution. If a senior team member leaves before the next generation is ready or the function is facing a specific challenge, a new hire could make more sense.
Furthermore, promoting an existing team member can prove difficult for colleagues to accept as they are not used to viewing them as an authority figure. An external hire may also provide a valuable opportunity to bring in new thoughts, ideas and experiences.
Taking on interim staff to plug gaps can also prove a useful approach if an internal candidate is not quite ready to step into the role or if the function is facing a one-off challenge that requires specific expertise. But the key to a successful strategy here is striking a balance.
- Be flexible
Enabling flexibility at every stage of your succession plan is vital. As the company evolves and grows, the skills, knowledge and experience required for individual roles may change. People leaving or joining the team will have an impact on its dynamics and potentially change the nature of other roles, all of which needs to be factored in.
- Revisit your succession plan regularly
A succession plan cannot be a one-off exercise that is undertaken and forgotten about afterwards. A successful plan evolves, is dynamic and includes input from senior staff, who must be prepared to support the development of their potential successors.
To help companies develop an effective succession planning strategy, here is a comprehensive 12-step guide to doing just that.
Graham Oates is chief executive of executive search and interim management agency, Norrie Johnston Recruitment. He was formerly a senior partner at KPMG for 14 years and managing partner and member of the UK Board. Graham has also been chair of the Insolvency Service and executive chair of Tribute, a software business that processed £1.5 billion in rail ticket revenue.
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Towards the end of last year, Coca-Cola appointed company veteran Brian Smith as its new chief operating officer (COO). After joining the company as Latin America group manager for mergers and acquisitions in 1997, Smith spent over 20 years moving up through the business and performing roles ranging from executive assistant to the COO to president of The Europe, Middle East and Africa Group, a position he held from 2012.
Smith is a fantastic example of internal talent successfully climbing the ranks, but his promotion provides us all with a prompt to think about the importance of succession planning.
It can be challenging when a senior team member is moved into a new position. If, like Smith, they have been performing a role for some time, such change has the potential to be very disruptive. It is at times like these when having a strong succession plan is absolutely vital to ensure the impact on the business, the team, customers and other stakeholders, is kept to a minimum.
But our research carried out among 127 senior directors in UK companies reveals that, in that country at least, as many as 46% of employers have no succession plan in place at all – and of those that do, most are incomplete.
In fact, the study found that even those that do have plans generally overlook some roles entirely. For instance, only 19% took the chairman into account, 20% the IT director, 33% the marketing director and 35% the HR director.
So here are five key considerations that it is important to bear in mind when devising a succession plan:
- Do not overlook junior team members
A good succession plan must go deep. While it may be tempting to focus purely on senior roles, by doing so you risk overlooking the great talent that may be sitting lower down the ranks – but they matter too. After all, if someone is promoted into a more senior role, they will, in turn, be vacating a position. So, to be as effective as possible, a succession plan should take a long-term perspective, identifying who could fill any gaps now, in a year or even in five years’ time.
- Provide training and development
The process of pulling together a detailed succession plan should prompt you to consider any training and development that may be required to fill any potential skills gaps among team members.
As you start to identify personnel who have the potential to fill top positions in the team and, in turn, evaluate the roles beneath them, you will naturally recognise potential gaps that could arise as a result of progression. Some positions will need to be recruited for externally, but it will be possible to fill others internally, given the right staff training and development.
Training is often as simple as sending employees on a relevant course, but development is a longer, ongoing process. It requires employers to provide individuals with the right experience, which is specifically tailored to their requirements in line with the goals they are trying to achieve.
- Consider hiring externally
It is important not to rule out the possibility of hiring externally. While there is much merit in developing internal talent, it is not always the ideal solution. If a senior team member leaves before the next generation is ready or the function is facing a specific challenge, a new hire could make more sense.
Furthermore, promoting an existing team member can prove difficult for colleagues to accept as they are not used to viewing them as an authority figure. An external hire may also provide a valuable opportunity to bring in new thoughts, ideas and experiences.
Taking on interim staff to plug gaps can also prove a useful approach if an internal candidate is not quite ready to step into the role or if the function is facing a one-off challenge that requires specific expertise. But the key to a successful strategy here is striking a balance.
- Be flexible
Enabling flexibility at every stage of your succession plan is vital. As the company evolves and grows, the skills, knowledge and experience required for individual roles may change. People leaving or joining the team will have an impact on its dynamics and potentially change the nature of other roles, all of which needs to be factored in.
- Revisit your succession plan regularly
A succession plan cannot be a one-off exercise that is undertaken and forgotten about afterwards. A successful plan evolves, is dynamic and includes input from senior staff, who must be prepared to support the development of their potential successors.
To help companies develop an effective succession planning strategy, here is a comprehensive 12-step guide to doing just that.
Graham Oates is chief executive of executive search and interim management agency, Norrie Johnston Recruitment. He was formerly a senior partner at KPMG for 14 years and managing partner and member of the UK Board. Graham has also been chair of the Insolvency Service and executive chair of Tribute, a software business that processed £1.5 billion in rail ticket revenue.
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