Leadership Development and Succession Planning: 
If you wait, you’re too late!

Guy Sapirstein, PhD
Resilience Consulting, LLC

The saying “change is inevitable, change is constant” is attributed to Benjamin D’Israeli who was a British politician about 150 years ago. Despite the awareness about the inevitability of change we all carry around – both as individuals and as organizational leaders – we very often ignore (or avoid) that which we know to be true. One such significant area for organizations is leadership development and succession planning. A study by the Future Foundation found that companies in the U.S. are devoting $105 billion a year to correcting problems associated with poor hiring and poor people-management practices (approximately 1.05% of the total U.S. GDP). While, for larger companies the direct cost factor associated with developing leadership and dealing with poor decisions might be significant, for smaller companies it is the indirect cost associated with disruption and lost productivity that can be even more devastating.

Since we all know that change (including leadership change) is inevitable, where do organizations go wrong? This article will highlight three common dynamics that cost organizations money in lost productivity, poor hiring decisions, and fixing leadership related problems.

Reactive versus Proactive

Like many areas in life, “squeaky wheel” theory works in leadership development and succession planning. Many organizations practice benign neglect when it comes to developing leadership in junior, mid-level, and senior employees. The development occurs more often when a problem is identified, rather than as a proactive measure to ensure the success of the individual and by extension, that of the organization. 

Leadership development is most effective when it is applied before, during, and after transitions in job responsibilities. In other words, throughout the employee’s time with the company. Not all employees are in leadership positions, and some may never be. Despite that, it is important to identify who has leadership potential (regardless of experience or seniority) and how to help them optimize that potential. Taking a proactive attitude towards leadership development means thinking of leaders as “anyone who can get people to work better”. 

Being reactive and waiting for the transition or need to arise before investing time, money, and effort in developing people’s leadership skills, means the organization will experience an inevitable void in leadership (at any level of management). Nurturing people’s leadership ability and skills is an ongoing process rather than a moment in time (a workshop, reading a book, completing a webinar, etc.). Although the process needs to start at some point, it needs to be supported over time. The only way to develop leadership in an organized and systematic way is to be proactive: identifying staff for training and development, providing ongoing support, and helping during the transitions of responsibility in the organization.

Problem Focused versus Strategic approach: 

Another common approach that deals with short term needs as opposed to longer term ones, focuses on “the problem” (we need to fill this position) versus taking a “strategic approach” (how can we create a pool of internal candidates we can confidently rely on). Being “problem focused” might require less initial resources than being strategic, but the difference in secondary or longer-term investment (time, money, effort) is significant and potentially disruptive to the organization. 

Smaller organizations, with fewer employees tend not to have as much turnover (in absolute numbers), but also have less bandwidth for dealing with leadership development (such as program development and management, mentoring and support, etc.). As a result, smaller organizations tend to focus on solving the problems when they arise. For those organizations, the sudden departure of a leader can create an internal crisis since there are no qualified internal candidates, and an external search needs to be initiated. Mid-sized and larger organizations often have “pools” of external and internal candidates. But unless the organizations are proactively developing those candidates, they face the same challenge of preparing the person for the position and associated responsibilities and demands. 

Strategic leadership development and succession planning, approaches change as the constant – through anticipating transitions, identifying and training internal (or external) candidates so they will be ready to assume the responsibilities of leadership with minimal disruption to the organization. Strategic leadership development also emphasizes the interaction between the person and the organization: or in other words – the organizational culture.

Focusing on “form over function” 

Every leadership position in an organization has responsibilities associated with it, the knowledge required to fulfill those responsibilities, but also the ever-widening sphere of influence (based on the hierarchy of the organization) related to organizational culture. Many organizations focus on the responsibilities associated narrowly with the position (i.e. the knowledge required). Those organizations neglect to train and develop candidates on the broader aspects of organizational culture required to build and develop teams, retain employees, and assure that the values and spirit of the organization are supported internally and visible externally.

The phrase “human capital” alludes to this issue – people in leadership positions are not just “resources” for the organization. They are as important as “capital”. This “capital” can be leveraged for better performance by individuals, teams, or the organization as a whole. Therefore the emphasis in leadership positions is not just on the “form” (or merely responsibilities), but also on the “function” of leadership, which includes the responsibilities as well as the wider influence on organizational culture. 

The benefit of developing internal candidates for leadership positions is that they are exposed to the organizational culture and are aware of its strengths and weaknesses. Appropriate leadership development and succession planning programs, prepare rising leaders to continually align their teams with the cultural values and practices of the organization (or relevant departments).

Summary and Conclusions

To conclude, organizations often fall into three common dynamics that derail leadership development and succession planning: they are reactive and not proactive; they focus on problem solving rather than being strategic; and, they focus on the narrow “form” rather than the broader “function” of leadership.

Not having a systematic leadership development and succession planning programs hurts organizations of all sizes, albeit in different ways. Smaller organizations are more vulnerable to disruption and associated financial implications (lost productivity, revenue, etc.), and mid-sized or larger organizations have greater direct costs associated with recruiting, training, and fixing mistakes made by poor leadership decisions and lack of long term vision.

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