- – Nearly three-quarters of CEOs and 71% of boards are not actively supporting or participating in succession planning strategies
- – Gaining buy-in from managers, who are having to identify their own successors and possibly their replacements, can also be an issue
- – ‘Myriad of issues stopping businesses building resilience against future shocks’
The majority of HR heads are facing challenges in planning succession, as businesses struggle to get adequate buy-in from the C-suite.
New research from talent insight experts Armstrong Craven reveals that 93% of HR and talent teams are experiencing succession planning challenges such as identifying the key skills for future leaders, obtaining necessary budget and not creating the right talent pipelines to respond to future needs.
The survey also found that overwhelmingly CEOs and Boards are not responsible for succession planning. In nearly three-quarters of companies, CEOs don’t have responsibility for succession planning, nor do 71% of boards. On top of this, 29% of HR respondents say it’s a challenge to get succession planning buy-in from the CEO, while 24% say the same about the wider board.
The research, which polled over 200 HR and talent professionals, 173 of which were senior leaders, found that only 24% of HR professionals described their organisation as ‘very proficient’ when it came to succession planning, while 95% said their plans struggled to deliver on key areas. Some of the challenges included:
- – Having trouble understanding the key skills needed from future leaders (cited by 27% of HR professionals).
- – HR/talent leaders struggling to gain budget to turn succession plans into actions (cited by 36%).
- – Succession plans not creating sufficient or adequate talent pipelines to respond to sudden changes in business needs (cited by 39%).
- – Obtaining buy-in from managers who are concerned they are having to identify their own potential replacements (cited by 28%).
- – Succession planning goals and criteria not aligning between the board and executive teams (cited by 22%).
Rachel Davis, Co-Managing Director at Armstrong Craven, said:
“The need for robust succession planning to build resilience against future shocks has become much more pressing since the pandemic. Yet businesses are coming up against a myriad of issues and challenges around succession planning, such as executive pay and remuneration, ESG, investor activism, embracing new leadership styles and hybrid working practices in addition to traditional attraction and retention challenges. Organisations need to ensure they are not lax in planning – and this includes ensuring they have Leadership Team support.”
Peter Howarth, Co-Managing Director at Armstrong Craven, said:
“Incomplete data and lack of formal succession processes are an underlying problem. 23% of the survey respondents – many of which were senior leaders in large UK organisations – said that they lack internal data to support planning, while over one in eight (13%) lack external data to support planning or benchmarking. 29% also lack a mechanism to accurately assess leadership, making it harder to understand what is right for their business.
“We find CEOs are, in many cases for the first time, taking a direct interest in talent acquisition, engaging with executive search and research providers. There’s a realisation that lack of talent in some specialist areas is leaving their businesses exposed – and risking future growth.
“In the current environment especially, it’s become a priority to mitigate risk of key roles being left unfilled. Socialising the next generation of leaders, ahead of need, is one of the best ways to reduce that risk.”
Armstrong Craven’s five key actions to support CEOs, Boards and CHROs
- Mind the gap. CEO’s may well have hand-picked their own successor, believing they have fulfilled their obligations. Many may assume that the Leadership Team will have done the same. With this in mind, ensure there is no gap in planning and that mechanisms are in place to validate the depth of any succession choices.
- Leaders ‘identifying their own replacements’ is an emotive issue. To support this, foster a culture of openness and transparency from the CEO and Board down, leading by example and encouraging teams to continually improve. The reality of this is difficult, but consistent reinforcement and good external data play essential parts in creating a culture where hiring exceptional external talent is part of normal operations.
- Exceptional talent is scarce and they are being approached for new roles daily. This means right now is a good time to raise this issue with the Board. Socialising new talent and building relationships, ahead of need and without pressure of interviews, allows leaders to better connect with future potential leaders. This will make attracting talent much easier should a vacancy arise. Taking a proactive approach in this way stands out – companies can make serious headway in attracting the best talent.
- The pandemic and move to hybrid working has led to a requirement for new leadership skills in many businesses. These skills are often characterised by high EQ and remote leadership expertise – which are hard to find. This is combined with a rapid rise in scale and scope of digitisation programmes. In response, it’s important for businesses to realise they need different skills in their leadership teams, that those skills are in huge demand, and working proactively, in advance, is essential.
- Calculate Leadership Risk. Armstrong Craven’s diagnostic tool analyses leaders within a business, gaining priorities to mitigate the risk of them leaving.