Great organizations, large and small know that the key to survival and marketplace competitiveness is anchored in their ability to be visionary, strategic, and agile. Status quo, while operative today, can easily become an organization’s bane tomorrow. This strategic mindset applies to the development and replacement of leadership as well. However an alarming number of organizations do not have structured succession management processes in place.

Succession management is a holistic system that targets in on mission critical positions ensuring that talent is identified, available, and ready to step into leadership roles when the need arises. Given today’s labor landscape, it is even more imperative that sound and dynamic succession management processes are in place. In short, the demand of leaders is outstripping the supply and major companies are ill prepared to address this.

This impending scarcity at the C-Suite and other leadership levels is being driven by a couple of forces. One, an estimated 75 million U.S. baby boomers will be eligible to retire by 2010. The average age of the chief executive is 50 and, not surprisingly, filled predominantly by baby boomers. The talent to replace these boomers will come from the next generation of only 45 million available workers. This transition places at risk, institutional knowledge transfer and the overall performance and sustainability of organizations. Secondly, the profile for those in the C-Suite has changed in the last 20 years and is continuing to change. For example, turnover of CEOs of major corporations has increased by 53 percent (influences include merger driven, performance related, and regular transitions like retirement). Consequently, the average tenure of CEOs has declined (from 9.5 years to 7.3 years).

It may be less convoluted to replace a CEO you know will be leaving, however, in a significant number of cases, the CEO’s departure catches an organization by surprise. This translates into a perceived and real crisis to internal and external stakeholders. It leads to remaining leaders and board members trying to make decisions that are in the best interest of the organization at a time when emotions are running high – not an optimal time.

Due to the combination of influences and impacts, it is probably apparent why succession management would be important for the organization at large. Business continuity is at the top of the list. Development and, consequently, retention of key talent is a first cousin. Organizations that are known for growing and advancing leadership talent from within create a powerful differentiator. This becomes part of the employer’s brand and is a significant attraction lever for new talent as well as a compelling retention lever for internal talent. The top companies for leadership development show significant bottom-line advantages including reduced costs associated with turnover and executive recruitment. As an example, companies pay their chief executives nearly three times more when they hire them from outside the company than if they promote from within.

At the individual level, succession planning may not be top of mind for the incumbent leader, particularly if the leader is the CEO or founder of the organization who has nowhere else to advance within the organization, and is not planning on retiring soon. Many entrepreneurs and business leaders so closely identify with their ventures that they think of their involvement as life-long; and no one wants to think about their mortality. Other leaders believe they’re too busy.  However, the individual business case for succession planning is just as important and impactful as the organizational business case, irrespective of the size and structure of one’s business.

Alongside business continuity and sustainability of the business, planned succession gives the incumbent leader a chance to leave behind a legacy. The leader can take time to share his or her vision, philosophy, values, lessons learned, and experiences with potential successors. It gives leaders a chance to reflect on and deliberately shape how they want to be remembered, what role they will play in developing and influencing potential successors, what is next for them, and how they will transition out of their role. A planned succession and smooth transition positively impacts the leader’s internal and external brand.

Senior leaders often view succession planning as another Human Resources exercise, but the truth of the matter is that it should be owned by the leaders within the business. While HR may take responsibility for coordinating the effort – e.g., helping identify positions, facilitating talent reviews and development plans, and measuring and reporting results; an accurate and complete snapshot of talent within the organization cannot manifest unless business leaders are engaged in the process. Business leaders, too, own and underwrite the on-going development of potential successors. Development is an essential ingredient in succession management and one that often dies on the vine. There are so many ways in which incumbent leaders can champion succession management and many areas that hinge upon their input including:

• Providing a vision for and knowledge of the strategic direction of the business and an understanding of the type of talent that will be needed (e.g., functional skills, knowledge, experiences, and traits).
• Sharing an assessment of the performance and potential of likely successors based on direct observations and feedback from others.
• Sponsoring and/or creating relevant development opportunities (e.g., rotations) for identified successors.
• Devoting time for one-on-one coaching and mentoring of potential successors.

Incumbent leaders can leverage their position and power within the organization to champion succession management as an inclusive process. This can be accomplished by recognizing and articulating that excellence comes in all shapes, sizes and colors and by stressing the need for leaders who can connect to the business’ target markets or who embody the strategy that will improve business performance. Just as recruiters insist upon a diverse slate of candidates from executive search firms, leaders can insist that diversity be reflected in the successor pool. The inability for the organization to do so points to a more systemic problem (e.g., no diverse candidates in the feeder roles) and will require more deliberate and programmatic efforts to reconcile.

At any point in time, business leaders should be able to confidently speak to who is ready now and who would be ready with development for specific mission critical roles in their units. Corporate and non-profit boards of directors are becoming increasingly requiring of this information. Best practices used by companies like Exelon include continual use of quarterly business-unit reviews to guide succession planning and development, and provide an updated snapshot of the leadership bench. This allows for timely feedback and coaching, and identification of credible “ready-now” successors for all senior-level positions.

The incumbent leader’s involvement in succession management is ongoing. The handing over of the baton is a process, not a single event. It is a recurring cycle of events that is “refreshed” prior to new players entering and exiting the game. The stakes are high. Consequently, the commitment requirement is high; and for well executed plans this translates into an ROI to boast about for the organization and individual leaders involved. ________________________________________________________________________

Charmon Parker Williams, Ph.D., an industrial psychologist, is a career and talent management consultant, coach, and contributing writer for Diversity MBA Magazine.

Talented candidates, especially those with coveted skill sets, are often able to pick and choose from multiple offers. Companies that don’t sell themselves effectively or have long, drawn-out processes will ultimately lose out.

So, you have identified the candidate you absolutely want to hire and you are about to make an offer. But you are up against a problem: Another company, or companies, are looking to land the same prospect. What should you do, especially when the job offers are indistinguishable in title, compensation, and benefits? How do you position and sell your organization’s offer – and your organization itself – to a candidate with multiple offers? The way your company recruits and manages the hiring process can impress a candidate and encourage that individual to choose your company over the competition.

Speeding Up the Interviewing Process

How can you speed up the interviewing process without sacrificing due diligence?

• Since most of the candidates you are interviewing are already employed, try to schedule interviews before or after typical business hours whenever possible. The simple gesture of scheduling the interview for the candidate’s convenience can speak volumes.

• If your candidate needs to meet with multiple representatives of your organization, try to combine some interviewers into groups to shorten the number of meetings. This scenario works well for senior executives interviewing with boards or for staff that will support multiple supervisors.

• Instead of asking the candidate back multiple times, arrange the interview schedule so all meetings can be held in one day or a half-day. This will allow the candidate to minimize the time away from the current job.

• Take your show on the road. Not all meetings need to be held at your office, especially first-round interviews. Although it’s very important for the candidate to see your facilities and staff first-hand, an initial screening interview can be held almost anywhere – at a local coffee shop, restaurant or hotel lobby.

Most candidates understand and even welcome the fact that they must meet several people at a company. Employed candidates, however, usually cannot come to your office for four separate interviews without arousing suspicion, or stay for four hours when they were told to allow two.  Candidates who are concerned about being missed at their current place of employment may be too distracted to put their best foot forward or to hear why they should work for you.

It’s important to be prompt when meeting a potential employee and, if there are multiple people on an interview schedule, to make sure that things are coordinated effectively. One of my candidates was kept waiting for 50 minutes by a senior executive because of scheduling confusion. As he had spent the better part of the morning at the potential employer and was due back at work, he was only able to give the interviewer 10 minutes. While the employer offered to reschedule, the candidate was so turned off that he turned down a second interview. By being flexible with interviews and considerate of your candidates’ time, you allow them to reduce the potential for raising red flags with their present employers. Candidates genuinely appreciate this consideration and will feel more positive about your company.

Positioning Your Organization: Setting the Groundwork for a Future Offer

Even if your role isn’t sales-oriented, you have to be a salesperson when it comes to wooing future employees! It is imperative to ensure that everyone on your internal interview team is on the same page and realizes the importance of selling the company and presenting a positive environment to potential candidates. They should be enthusiastic, timely, and prepared for the interview. All it takes is one interviewer who is disorganized, having a bad day, or imparts a conflicting message to leave a bad taste in a candidate’s mouth. Candidates want to hear honest answers to questions, but if someone in the group is known to be negative or comes across in a less-than-compelling fashion, consider whether that person can be left out of the process or coached to present more effectively. Everyone in the interview process must be able to speak knowledgeably, passionately and consistently about the company.

Because your ideal candidate may already be employed, it’s also important to know up-front why he or she is looking for a new position. In the initial stages of communication and interviews, ask questions to get a clear understanding of why the individual is choosing to leave his or her current position, and carefully document the reasons. This way you will know in particular how to position your organization in regard to the candidate’s likes and dislikes. After the official job offer is made, if your candidate seems hesitant to leave a current position or you learn that a counteroffer has been made, these reasons will be useful in reminding the candidate why he or she began looking for a new job in the first place and how your company can fulfill those needs.

Make sure that, in addition to going over the particulars of the candidate’s role, time is spent discussing the organization itself – its selling points, values, history and community involvement. As important as responsibilities, management style and opportunity for advancement are, it’s the intangibles of an organization’s culture that can be the deciding factor when a candidate is weighing options. Make sure informal benefits are known, too: reduced office hours during the summer months, telecommuting options for working parents, or morale-boosting social events, such as golf tournaments or company parties.

Negotiation Time

Once an offer is extended, speak openly to the candidate about the timing of negotiations and decision-making. If your interview process has had open, two-way communication, you should have a good idea whether your prospective employee has multiple suitors. When dealing with that situation, you want to achieve a balance of putting some positive pressure on the candidate while being understanding about the decision-making process he or she is experiencing. It’s reasonable to give a bit more time to a candidate who asks for it. During that period, however, the hiring manager and/or Human Resources should reach out to the candidate, offering to answer any questions and conveying how much the candidate is wanted.

The more personal contact you extend, the better – from delivering the job offer over the phone, to following up by making sure the candidate has received and understands the particulars of the written material. One client of mine sealed the deal by sending an offer letter to the candidate in a package with a company polo shirt; it immediately made the candidate feel she was a part of the team.

Candidates truly value open, direct communication and an appropriately timed process. As important as it is to expedite the hiring process, it should never move so fast as to overwhelm the potential employee or undermine an organization’s thoroughness. Conversely, taking too much time puts you at jeopardy for losing the ideal candidate to your competition. By putting forethought into the hiring process, you can ensure candidates will think well of your company, your organization will not be put at risk — and you’ll successfully hire the people you want!