Challenges and pain points in succession planning

Succession planning is a highly political and emotional process – this applies to executive teams, boards of directors, and HR managers as well as to potential internal succession candidates. The interaction between the parties involved can lead to friction and conflicts of interest in several areas. 

Typically, the pain points in the internal succession process arise in three areas: the planning process, the identification of talent, and the development and integration of succession candidates.

When companies start setting up a succession process, the first challenge they face is how to approach the opportunity with a global, cross-organizational perspective and balance that with the unique characteristics of regional business units. 

Managing expectations and establishing clear communication rules also presents a challenge: How and when are potential succession candidates named and informed that they have made it onto the succession “list”? How clear are the expectations of the named talents – and what support can they expect from the company?

Regularity is another critical factor in the planning process: How often should succession planning be on the agenda of boards of directors, executive teams, and HR managers? How often should talent lists be reviewed and updated? And if talents are removed from these lists, when and how should this communication take place?

Organizations tend to evaluate external candidates more positively than internal talent. With external candidates, the focus is on the strengths that clearly set them apart in the selection process for the leadership role. With internal candidates, everyone in the company is well aware of their weaknesses and the possible gaps in their skill set. 

The effort and cost required to close these gaps tends to be quantified more highly than the effort required to integrate external candidates. This is especially true for internal talents that do not fit the usual profile of leaders: more diverse talent often flies under the radar and is overlooked when succession pools are established. This is particularly true when there is a lack of systematic assessment processes that take into account both role-dependent and role-independent requirements.

It is common for the identification and assessment process to reveal a lack of suitable talent to fill the succession pipeline in the long term. In this case, companies must strategically invest in the development of talent with a clear, forward-looking, long-term strategy. Another critical factor for success is the continuous support of talent during the transition to new positions, for example, through ongoing training and development programs.

When discussing such challenges, we are often asked how “others” solve these problems. Our own problems are often considered to be “home-grown.” Surely, the thinking goes, other companies are better positioned in this regard?

However, our experience shows that “ready-made” solutions that enable companies to strike the right balance between, say, an overly complex, inflexible succession process and a succession plan based on ad hoc decisions and instincts are rare. 

This is because companies worldwide and industry-wide are currently undergoing a process of adjustment here. The requirements for C-level positions are changing dynamically, as are market conditions. 

The companies best equipped to meet this challenge are those that recognize the importance of the process and focus their attention on building a sustainable, successful talent pipeline.

The questions that HR managers, executive teams, and boards of directors should ask themselves are therefore: 

• Which processes and structures lead to the goal of implementing continuous, sustainable, and dynamic succession planning at the C-level in the company?
   
• How can we successfully develop and sustainably embed the necessary talent-first mindset among leaders?
   
• How do we link succession planning for the top management team with the organization's other talent management processes in order to continuously fill the talent pipeline to the top? 

When companies ask themselves these questions, the pain points of internal succession planning can give rise to sustainable, successful solutions for future-proof talent management.