In the eyes of HR, Jeff Bezos executed the ideal kind of succession planning in business. After announcing his decision to step down as CEO and transition to executive chair, everybody just went back to work that day.
Talent managers who have seen companies live through the departure, dismissal or demise of a top executive would know: the ability of a leader to step out of the spotlight, without drawing too much attention to the transition itself, is the kind of succession planning organisations should strive for.
As early as 2014, Bezos had already spoken publicly about a succession plan for him and all other senior leaders at Amazon.
How to develop leaders from within
Leadership planning is a long and steady process. The most effective leadership transitions happen in times of growth. In the case of Amazon, Bezos unveiled his exit as CEO at a time of massive success for the company – in a pandemic at that.
When Ginni Rometty became IBM’s first female CEO, for example, the internal hire wasn’t an overnight decision. Since 1981 and until her retirement in 2020, Rometty had purposefully built a high-powered career leading projects for the legacy firm.
When the time arrived for CEO Samuel Palmisano to start planning for his retirement, IBM already had a top-calibre talent such as Rometty to take charge
Apple CEO Tim Cook, who was handpicked for the role by Jobs himself, has spoken openly about finding diverse talent to carry on that legacy. “I see my role as CEO is to prepare as many people as I can to be CEO,” Cook told BuzzFeed News.
How to choose a successor
A succession plan would have to be entrenched in a successful leadership culture. But what levers should HR pull to ensure the transition is seamless?
Successors are more likely to gain an in-depth knowledge of the team, culture and operations by shadowing incumbent leaders; and being mentored and empowered to take on their own projects. These real-world challenges allow them to take the reins at once should there be a gap in leadership.
The choice of a new CEO is often made from a shortlist of senior executives. “While the obvious successor to a role may be the person who is immediately next in line in the organizational chart, don’t discount other promising employees. Look for people who display the skills necessary to thrive in higher positions, regardless of their current title,” they said.
How to Plan for Succession During a Crisis
Succession planning becomes all the more crucial in the time of disruption. The pandemic has upended leaders’ notion of business-as-usual and, along with it, possible plans for elevating new leaders.
According to a study on corporate governance revealed, more than 60% of directors reported their board “had not reviewed or updated the succession plan for the CEO and other key executives” in the context of the COVID-19 health crisis. “Business succession planning is critical at all stages of the business life-cycle,” lawyer Erin Brown shared with HRD.
Brown recommends organisations identify “who is to make key business decisions if business owners or key employees become incapacitated” to lead the business, and that they establish mechanisms to “ensure multiple parties are authorised to undertake fundamental and day-to-day business operations”
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