I recently read the article “Building Companies to Last” by Jim Collins. In stressing the importance of growing your management team from within, Jim mentions that his team had witnessed only 4 successful companies in which an outsider was hired as CEO. In contrast, “less successful companies were 6 times more likely to go outside for a CEO. In essence, successful companies home grow their management while less successful companies do not.
This likely does not come as a huge surprise to anyone reading this. So, why don’t we do a better job of growing talent from within?
1. Lack of a formal process
Most companies have a general idea of who is “next”. However, they lack a formal way to evaluate why they are next and what they need to be ready.
2. The Event
Succession Planning is often viewed as an event. It’s something that we do once a year and then forget about for the rest of the year.
Succession Planning is a lot like saving for our retirement. We all know we should be saving for our retirement, but other expenses seem to get in the way. Likewise, budgets for developing our leadership talent always seem to be the first thing cut when things get tight.
4. Organizational Commitment
Too often, succession planning is owned by HR. This lack of organizational commitment makes any Succession initiative impossible to sustain.
5. Lack of Objective Data
Too often we depend on subjective judgments to drive our succession decisions.
Now that you know what not to do, over the next few weeks I’ll outline some tips for what to do to ensure you are doing everything you can to grow talent from within.