Future-Proof Your Succession Strategy

Four Changes You Need to Make - Now

No question: leadership matters.

Weak leadership benches EQUAL poor outcomes

1.0x 1.0x

WeakBench

WeakBench

StrongBench

StrongBench

1.9x 2.0x

Slower Revenue Growth Indexed Year-Over-Year Revenue Change

Slower Profit Growth Indexed Year-Over-Year Profit Change

But leadership has changed in the new work environment.

Leaders Are Asked to Take on New and Different Roles

Succession implication Organizations must:

• Identify and plan for evolving leadership needs

• Prepare successors for cross-silo leadership

14%

of all leadership positions are newly created each year

50%

of leaders’ direct reports have increased their reliance on

others to get their job done

And Today’s Leaders Operate Within Constant Change…

Culture Change

Restructuring

Market Expansion

Leadership Transitions

Mergers and Acquisitions

None

0% 10% 20% 30% 40% 50% 60% 70% 80%

Organizations Undertaking Change Initiatives in the Past Three Years

The Typical organization has undertaken five firm-wide changes in the past three years.

Not surprisingly, most organizations are dissatisfied with their succession pipelines.

And It’s Both HR and Business Leaders That Are Unhappy

Dissatisfaction with Current Succession Management Process

Percentage of HR and Senior Leaders who agree that elimination of current succession process would not change quality of successors

36% 38%

HR Leaders Senior Leaders

Traditional Leadership Pipelines Are Broken

Succession Pipeline Breaks

Narrow Pipeline

of high-potentials will exit the

pipeline

55%

Clogged Pipeline

of leaders do not perceive significant

upward career opportunities

75%

Rusty Pipeline

32%

of HR executives would change members of

their leadership team if given the opportunity

Pipeline to Nowhere

31%

of leaders are in newly created

positions

Pipeline approaches to succession programs need to evolve to make them effective in today’s unpredictable, complex business environment.

Our research shows there are changes you can make – now.

Instead of using pipelines, progressive HR leaders are now managing succession similarly to a financial portfolio.

The CEB Model: Succession Management as Portfolio Management

Demand-Driven PlanningAssess leadership needs that will lead to achievement of strategic goals.

Leadership Team RebalancingRebalance the leadership team against strategic goals

Broad SourcingSelect successors from across the

enterprise through greater transparency.

Deliberate DiversificationPrepare a leadership bench for a variety of futures to hedge against uncertainty.

Managing a Portfolio of Investments

Managing a Portfolio of Leaders

Translation to Succession Management

Goal SettingDetermine financial goals

Investment Selection Identify the right investments given financial goals

Portfolio Rebalancing Reassess investments and allocations given changes in goals or portfolio

Rebalancing Reassessing current leaders’ fit given changes in strategic goals

Asset Diversification Diversify investments within the portfolio to mitigate risks

The CEB Model: Succession Management as Portfolio Management

Needs Assessment Assessing leadership need COSs that will lead to achievement of strategic goals

Sourcing Selecting successors who will help the organization meet strategic goals

DiversificationPreparing a leadership bench for a variety of futures to hedge against uncertainty

A new approach is needed: can you afford to stand still?

The stakes are high. Organizations with weak leadership benches grow at only half the rate of those with strong benches.

• Redesign your organization’s approach to succession management

• Objectively assess your leadership bench strength

• Benchmark leadership talent and talent processes against the best in the marketplace

• Develop the capabilities of your leaders

If your succession program isn’t delivering what you would like it to, CEB can help you:

All research leveraged from CEB Corporate Leadership Council

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Future-Proof Your Succession Strategy: Four Changes You Need to Make - Now

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