The following points summarize the discussion held on this topic during this CEO Solution Exchange at the 2015 CEO Talent Summit in Dallas, TX, Sept. 30-Oct. 1, 2015:
A critical role for CEOs is to make sure they have the right people in place—people who are aligned with and support the vision of the company. In addition to planning for their own successor, they must have a succession plan in place for key management and leadership positions, as well.
Think of your succession ‘plan’ as managing succession ‘risk’. Consider the ‘3 bus’ situations: CEOs need to plan for being injured by a bus, killed by a bus, or getting on a bus (for business or personal travel).
- Understand your role during the CEO succession process:
- Once you begin delegating during the succession process, how do you stay relevant?
- Have you planned for changes in your own role?
- What does your new role look like?
- What happens when a potential successor for a key role isn’t willing to relocate?
- Consider searching down a level in the organization to find potential candidates. These executives may be hungrier and more willing to relocate for career advancement.
- Seek potential candidates that have connections to the location, i.e., college, family, etc.
- Have an ongoing dialogue with key executives about timing and location(s) for potential moves.
- If a candidate is ideal but unwilling to relocate, develop a structure that allows him / her to work remotely.
- Consider sponsored housing and other incentives.
It’s every manager’s responsibility to be aware of staff who under-perform, may be thinking of leaving, may be considering moving out of state or may have moral turpitude potential. There should also be a consideration given to potential unexpected losses such as death of an employee.
In managing talent risk, ask yourself these questions:
- Is there enough supply? Are you developing your people? CEOs and senior management must be involved.
- Do you have a risk reduction plan? If a key executive leaves unexpectedly, starts underperforming, or has legal issues and needs to leave, what’s the plan?
- How are you protecting your company from future events that you can’t predict?
Keep millennials engaged:
- Once they join your organization, how do you retain them and develop them into future company leaders?
- Anticipate churn at this level. Are you ready to promote when a valued employee is ready for their next role?
- Do you keep the door open for them to come back? Consider implementing a “call back” program. Follow up with them just after a year (after they’ve had an evaluation and have had an opportunity to reassess) and determine if there’s an opportunity to bring them back.
Access to the CEO and senior leadership is important to millennial employees—be sure they have access to the CEO and management.
- While pay is a strategic lever, it can’t be used exclusively to solve every succession problem.
- Develop strong, long-term incentive programs—a ladder of payouts.
- Create and execute robust non-cash programs.
- Systematically share analysis of true compensation (including benefits, vacation, etc.). Consider having managers share this information with employees vs. HR.
- Explore loan repayment programs as an incentive for younger employees to keep them on board.
- Pay fairly and review your program on a regular basis. Cash won’t keep people; give a fair salary and great benefits to attract and retain great employees. Consider paying star performers more and make no excuses for that.
Sponsored by Board Advisory:
Jeff McCutcheon, Managing Director and Co-founder
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Paul McConnell, Managing Director
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