SUSAN: Welcome back to The JoyPowered Workspace Podcast, where we talk about putting humanity back into HR. I am Susan White, a national HR consultant, here with my good friend and co-host JoDee Curtis, owner of Purple Ink, the author of “JoyPowered,” the inspiration for this podcast series. Today’s topic is succession planning.

JODEE: So Susan, what does that word even mean, “succession planning?” When I hear that, it takes me back years ago when I joined an organization, and I asked our CEO during my first week or two of employment, I said, “Do we have a succession plan?” And he said, “Oh, yes, if something happens to me, we have named a successor, and it’s confidential information, and myself and the successor are the only ones that know about it. So we’re in good shape.” And he turned around and walked away, and I just stood there with my mouth open, thinking, “What?” But in his mind, they had done all the succession planning they needed. So how would you define that?

SUSAN: What scares me about your story is, I keep picturing the two of them getting hit by the same bus at the same time! The two people who know what’s supposed to happen! You know, succession planning is really, um, where a business takes time, sits down and figures out who is going to replace everyone in our key positions, so that if that you know, uh bus does hit uh, somebody, that we know immediately who is on the radar to replace that person, and I do, I do, really do believe that, um, businesses need to be very thoughtful about it. Very intentional about it. Even if there’s no bus hitting, if it’s uh, the, somebody quits that you didn’t expect to quit and maybe you hadn’t thought about well, who’s my, who’s on the bench for that particular role? So it is, I think, a very important management discipline that companies need to spend time and really think through.

JODEE: So does it have to be a formal plan, or what’s, what’s the difference between a formal plan versus an informal one? Obviously, my example was very informal.

SUSAN: You know, I don’t – I wouldn’t tell you that it has to be formal. I think it can be informal. You just have to have a plan and, um, there was a study done in 2015 by the Hanover Research Group, and they actually interviewed over a thousand businesses across 54 countries, because this is not just a U.S. issue. It’s really a global issue. Anywhere that you have a company and you have key players, you need to make sure that that company is sustainable if one, two, or all of the leaders for some reason would, would depart. Um, in the study that they did, they reported that only 53 percent of organizations actually take the time to identify candidates who are ready now for promotion into specific key roles. So you’re thinking that we think about that I – kudos to half of the population of the businesses in this study, but the other half I think should be concerned.

JODEE: Is there a size where it only makes sense to do this if you have x number of key leaders, or is there any kind of magic number on when you should have one or shouldn’t?

SUSAN: You know, I think if you’re a sole proprietorship, forget about it. The business is done when you are done, okay? Um, but I do believe that if you are a business leader and you have a – I would say even a handful of employees, that you want to think about, what if something would happen to you. Um, you know, what, what’s going to follow. Is this business going to end when I end, or is it – you want it to, to be sustained? And then clearly, if you’re a company of any, you know, size, you know, 50, 100, 150, 4,000, 275,000, you really do want to figure out what are the key roles that this business is dependent upon having filled by somebody of really, you know, strong talent and high quality. Um, it may not be just the CEO or the c-suite, you know, it may, it could very well be, maybe your head of sales is a couple layers down in the organization. Well, that role might be a really pivotal role for that company’s strategic objectives. Um, you know, if you’re a manufacturing operation, it could be that your plant manager could be the person that if that person, that, that spot was left open very long, that you could have dramatic impact on your profitability.

JODEE: You know, I recently heard a story about a small company’s technology person left, and left with all the passwords and codes and –

SUSAN: Eeks!

JODEE: – no one else had access to that information, and he did not leave on good terms, and he did not supply that, so that could be another – that could be certainly a key position in the organization too, that someone may be the only person who understands how to use equipment or technology or has access to certain key elements of the business that other people don’t know.

SUSAN: Absolutely. You know, I – you can tell I’m a big fan of having a succession plan, you know, a thought-out one, but I would tell you there, you know, there are some drawbacks. I always think we should look at the pros and cons of, of any topic.

You know, I’d be interested in some drawbacks that you see; one that I see is, sometimes I’ve seen companies have a succession plan and they go through a lot of effort to identify what are the key roles that could really impact us if it’s left unfilled for very long, and they spend good quality time looking at all of their internal staff to figure out who here could actually replace Joe or Cindy or Mary. Um, and they think about what is that person, you know, still lacking. Let’s spend some time some money and get you know, Cindy or Mary or Joe really developed so they’re ready. But then, they do it one year they put it on the shelf, and then they never look at it again. And then Cindy leaves, you know, 18 months later, two years later. They’re in a panic. They go out, they try to recruit, and the work doesn’t really become a living viable organ. It became an exercise they did years ago that, that has dust on that binder.

JODEE: Right, or on the flip side, maybe if the company experiences significant growth or a particular role becomes more important in the organization for whatever reason, and then that identified candidate maybe is no longer the right person, if it’s not kept updated and kept viable throughout the process.

SUSAN: That’s a great point, because the skills needed in the changing, you know, industry, changing environment could very well have changed, and the person you’ve got slotted is not the right pick.

JODEE: So how often do you need to update the plan?

SUSAN: You know, I would say no less frequently than annually, um, and I’ve seen companies that, every quarter, they pull it out, dust it off. They first look to see, do we have the right skills identified for that particular role, because it’s – things are changing. But secondly, they take a look at who do they have on the identified to be on the bench for those roles. Have any of those people left? Have any of those – their performance level maybe dropped or maybe improved. So do we need to make changes? So I’ve seen it happen quarterly, but I would say for most businesses I think an annual, really, uh talent planning process that includes succession planning is probably appropriate.

JODEE: And that doesn’t have to be a real time-consuming process. I would suspect it’s a less time-consuming process if you keep it ongoing, updated, or if you’re looking at it every quarter just to do a check and a review as opposed to redesigning it every five years –

SUSAN: Absolutely!

JODEE: – where you’re starting from scratch again.

SUSAN: Absolutely.

JODEE: How do you get started with a succession plan, and who, if, if you have a company or client who has not done anything formal, for sure, and maybe even informally, where do you start?

SUSAN: You know, I would start at the top of the house, and I probably would sit down with the CEO or the owner or whoever the, you know, the leader of the organization is, and spend time thinking about who are his or her direct reports. And let’s think about this. You know, first of all have, have you thought about who’s going to replace you, and if you have a board of directors, is the board asking that question? And If they’re not they should be, you know asking who’s going to replace you should something happen. And then sit down with that CEO and talk about their direct reports.

Then I would ask about who are the key pivotal players in the organization that are – that’s deeper. And really have an understanding of those roles. And it might take some time to really understand, you know, first of all, what are the leadership factors that are necessary in your organization that we want to make sure that we evaluate any future successors against, and then for those key pivotal roles, what are the technical competencies? So if, if you decide that your CFO is a role that you could be at real risk leaving that uncovered or unoccupied, what are the technical competencies that your organization needs to have in that role? So that’s step one.

JODEE: Right, and so it doesn’t have to be – the entire organization doesn’t have to be done at one time, right?

SUSAN: Yeah.

JODEE: Which would be great, but it can be a slow starter. It can be starting with the CEO and a few key positions, and over time add on more roles and more positions.

SUSAN: Absolutely, and I would start at the top, um, because you know, I think that’s probably going to have the most impact should a job open up there, um, in the sustainability of the business, but you could certainly go all the way deep into the organization. Um, if you’re a manufacturing firm and you’ve got somebody who is a specialist in a particular role and maybe you only have one or two of them, you definitely would want to have a succession plan around that particular function at the right time.

JODEE: Yeah, Susan, can you share any experiences of companies you’ve worked with that had a succession plan or were building a plan and had results that surprised them?

SUSAN: Yeah, you know, I can’t think of one. Uh, we had a really well-developed succession plan that we built and it was, you know, we thought it was working really, really well because we’ve had a couple of people turn over and, actually, one retire and one move on to another company, and we were able to go to our succession plan, and the people that we had been readying for the job, they were ready, and it was just a very nice easy transition and the individuals felt good about it, the organization really benefited.

But I can also think about that same company, where we were confident that a particular person who was going to be the right person and be ready for it, we went to them, we said, “Aha, your time has come!” And the individual said, “You know what, since we talked about this, I’ve changed my mind. I’ve got a couple grandkids now. I really don’t want that kind of responsibility.” And you know, shame on us, because we had really – we’d had the conversation when we had done the plan a year earlier and 11 months had passed and we had not really kept the conversation alive.

JODEE: Yeah, I think that’s a great example of, uh, times when companies can make assumptions about who is even interested in the role, or who might want to grow within the organization, but not in the obvious role that you’re thinking of them for. They are looking at taking a different path in the organization.

SUSAN: You know, that’s fair. You know, you’d asked like, where would I start? And of course I said for building a succession plan, I would start with figuring out what those key roles are. I think the second really critical action item is to figure out who do you include in the population of people that you want to consider as potential successors. You know, you have to decide if you’re focused initially on your CEO and then all that CEO’s direct reports, you know clearly any of those direct reports potentially could be, um, replacements for each other. So that might be the population you start with.

But then everyone who reports to those direct reports, you might want to go through a process of figuring out, should I include them in the population that we need to assess to see if they’re ready for either their boss’s job, should something happen, or for maybe any of the other bosses? Maybe not their direct boss, but anybody else who’s at that senior table.

And then you have to stop and also think about who are the high potential people that are deeper in the organization, because you really want to figure out who is going to be ready to assume a role should someone walk out. Either they’re going to be ready now, if someone left tomorrow, or maybe somebody, you know in a year from now could be ready with some additional development, or even then maybe someone three to five years would be a good, a good choice to be a potential successor. And there’s so much wonderful development work we can do to help someone get ready, but we want to make sure that you are really thinking broadly at first, as potential successor candidates.

JODEE: Right, so let’s talk a little bit more about that development piece. So if your succession plan is in place and you’ve defined a person or a couple of people who are in line for that, taking on that role. What can – what do you do with this information now? What can you do to continue to grow and develop those people to prepare them for that next role?

SUSAN: You know, I think it’s important, first of all, to sit down and talk to them about their potential candidacy to be a successor, to make sure it’s something that, you know, is in alignment with their own career path and planning. But let’s just say it is. And, uh, most of the time people are like, “Oh gosh, who me? Sure, I’d love to keep growing.” Uh, but then I think you really need to do an individual development plan and talk about obviously, you’re really good at these three things or five things, how many ever there are, um, or else you wouldn’t be considered for this. But here are the one, two, maybe three things that we really need for you to work on, so that you are ready for that next role, and then outline in an individual development plan, how are we going to equip you with those, those particular competencies or strengths?

You know, I would love to talk about maybe a few of them, because I know, JoDee, you’ve got experience in helping people develop. Any examples you might have, if somebody is really competent in a particular area, let’s say accounting or finance, and we look at them, maybe as a potential successor for the CFO, but maybe they’re not a great communicator, or maybe their people skills aren’t as strong. What are some types of items you’d put on that development plan?

JODEE: So I would first start, as you mentioned, in not just creating a development plan around where they need further help or assistance. In other words, we tend to look at what are their weakest areas and get focused on those as opposed to building on their strengths, and what are they doing really well, where they can have the biggest impact on the organization. Not to say that we wouldn’t have to raise the bar on communication skills or people skills and and continue to assess them in those areas as well, but my primary message would be to not forget about what got them where they are and how to allow them to focus on what they do well first, and then, is it more training? Is it individual coaching? Is it going to lunch with someone, an internal mentor who can talk about the importance of those two skills, or give them tips on what they’ve done in those areas in the past? Is it a really good book that they might learn from? Lots of different things.

SUSAN: Oh, that’s great. I’ve seen people being sent to conferences where they thought that perhaps they could build some skills. Um, I love all the ones you’ve come up with. Sometimes it’s letting that person who you’re trying to assume a higher-level role, maybe you start inviting them to participate in meetings at the higher level, um, so that they get some exposure, if it’s a position that’s going to be interacting with the board, maybe they start going along to board meetings. There’s a lots of things that could be on an individual development plan to really help that person be ready when the call comes that the job is open.

JODEE: So what about when that call comes, Susan? Aren’t you kind of setting people up to expect the call, then, or if you tell me I’m in line to become the CFO and I think I’m ready now, or I think I’m ready a year from now, and the CFO decides to work another 10 years, haven’t you just made that more frustrating for me by telling me I’m the successor?

SUSAN: You know, I love that question, because I think it’s really important you never tell anybody that they are the successor. I do think it’s important that you let the person know how highly they’re thought of and that we would like to consider you as a potential candidate to be a successor for so-and-so, and I always would use “potential,” I would always say that when that job opens, we’re going to run a search, internal or external search, internal and external search, but we want to get you ready so that you’re a viable candidate to be a successor. And so I would – I’d be very careful, and I think that is a real risk, because if someone thinks that, you know, I’m just biding my time until so-and-so leaves, it can be very frustrating, especially if they’re going to be a talent, or else you would not have had them on your potential successor list.

JODEE: I actually just had that question last week, Susan, with a client I was working with whose, uh, one of their directors is leaving the organization, and the manager under her feels very strongly that she’s ready for the role, and the CEO isn’t quite so sure, and they do not have a succession plan in place, and he was asking me, does he need to do an outside search for the position, and if he does, does he risk losing her, the manager he has, or should he just give the manager a chance to try the job and see. What – have you come across that before, or any thoughts on that?

SUSAN: Yeah, you know you really do want to be careful if you’ve been working with someone and really grooming them and helping them understand the value of taking on additional development opportunities so that they can be considered a potential successor, then when the opportunity comes you kind of, like, at that point, I think need to give them an opportunity to, to show what they can do. If it doesn’t work, then the good news is that they’re with you, you may have the opportunity to let them go back to their old role. Um, but if not, I sort of – I feel like that would be the right thing to do. But you know what, there’s a lot that can go into individual situations –

JODEE: Right.

SUSAN: – you know.

JODEE: Right, right. Actually, that was my advice in this situation, that the person be given a promotion there. I didn’t actually recommend that they take on the title or exactly the role the person has who is leaving, but that the the manager be given some opportunities to grow and and take on some new assignments.

SUSAN: Yeah, I think that’s smart.

JODEE: I think she was ready, and she was very passionate about taking it on and trying it.

SUSAN: My guess, they would have lost her if they had done an external search.

JODEE: That was exactly my recommendation, that I said, “I think she will leave in a minute, um, and, and she has too many skills, uh and, and strong history in the organization to risk that at the time.” And again –

SUSAN: Sure.

JODEE: – that was that particular situation. Other clients of ours, they just consistently always do a search so they have a comparison. And I think that’s not a bad idea either.

SUSAN: And if that’s in the culture and everyone knows it, then that’s not going to be offensive. Right?

JODEE: Right, right.

SUSAN: I think that’s great.

JODEE: They make that clear.

SUSAN: You know, an element to succession planning that I’ve seen a lot of companies do that I really like is, um, you could certainly have a CEO really sit down and map out with a consultant or with their HR Director or whoever, you know, what the succession plan’s going to be and talk to individuals and build development plans, but what I really like is where the senior leadership team gets together and as a group they really assess the talent for all the critical roles, because as a leadership team that’s part of your responsibility is to ensure the ongoing success of the entity, so this is such an important, um, factor to your ongoing success.

I would have the senior leadership team really come together and do calibration discussions. Where if we believe that, um, these two people could be potential successors, or three people, or whatever the number is, let’s get together and talk about those people, and let’s look at their past performance. Let’s look at their potential and let’s decide of those three, you know, who’s number one, number two, number three, at least in this moment, recognizing things could change, and then let’s figure out, what do we want – what kind of development we want to do of all of them. I do think it’s a leadership management team initiative to do a really strong and powerful succession plan and not just, you know, as your example you started at this morning the managing partner and the person is going to be the successor knew it. Nobody else did. I think this is a real business management issue, to do a good succession plan and to do it as a team.

JODEE: Right. I agree, and I think it’s important to think in succession planning that even if you have a very successful person in the role, the person that follows them doesn’t have to have all of those exact same skill sets and strengths and – we’re working with a different client right now who’s retiring from an HR Director role that she’s been in for 30 years, and I’ve encouraged them to think about the, the replacement for the role that might bring something different or that might not – to not just look for someone who looks exactly like she does, even though she’s been very successful and very well-liked and a key part of the organization, to try and find someone to come in and think that she’ll bring exactly the same skills and styles is almost a setup for failure, I think to to compare everything the new hire might have.

SUSAN: You know, I worked with a not-for-profit and they were looking to replace their Executive Director, and this Executive Director was so well-loved, and you just could not help but love this person. They helped bring the organization through very difficult times, really got money in the bank and made them a real positive brand in the community. Um, but we got to the point in the organization where we needed a different type of leader. Uh, we needed somebody who brought different types of skills that were going to take us to the next level, and it really, it caused us – and I was on the search committee – to think about this, let’s get a successor who not only builds on the strengths that we’ve got, but how do we get to that next point? So I think it’s very relevant to what you were doing with your HR Director.

JODEE: Right. So the actual position might evolve a little bit, um, even the the title of the position, actually, even could change, and thinking this doesn’t have to be the exact same role that someone had before.

SUSAN: It’s funny, in succession planning with some of my clients, I’ve seen where we’ve had a particular role that had, you know, X, Y, and Z included in it, and as we were starting to do the succession planning and figuring out the real competencies we needed, we started to do some organization structural changing, because we realized that probably nobody out there is going to have this unique, you know, skill set, that’s going to be able to do X, Y, and Z, but we could get somebody really good who could do X and somebody else who could do Y and Z. So it’s a great opportunity, succession planning, especially with the whole leadership team around the table, to think through, if we replace Susan, you know, would we replace her as is, or in a very different way.

JODEE: Right, right.

SUSAN: So JoDee, we actually have a caller today that would like to talk about succession planning, and I think he may have some questions for us. So let’s go to our caller. Joe?

JOE: Yeah, hi, my name’s Joe, I’m a small business owner of a professional services company. We’ve got about 15 employees, making us kind of a small tight group. My partner and I have gone through the process of putting together a plan over the next 10 years of transferring ownership. The podcast began with JoDee telling a story about asking her manager if a sucession plan was in place. I wanted to ask, as an owner or manager, how important you believe it is to share the succession plan with your employees who may not be a part of the plan, and then even maybe a step further to what level of details you believe we should share about that plan.

SUSAN: Joe, that’s a great question. JoDee, what do you think?

JODEE: Well, first of all, Joe, congratulations to you on creating a plan. I think you’re probably well, far ahead of most businesses of any size, small or large, that you’ve even – not just thought about it, but also put a plan in place, so kudos to you for doing that –

JOE: Well good, it wasn’t, it wasn’t cheap, so I’m glad.

JODEE: And understanding that the plan can be flexible, and things might change with your business over time, and you might make different decisions, but I think your employees will be happy to know just at a minimum that there is a plan in place, right? So that if something were to happen unexpectedly, that you’re being strategic and futuristic and thinking through that process. But yes, it’s complicated. Right? Like, how do you tell them there’s a plan in place but keep it too close to the vest, right? Because you don’t want employees to think that they’re on the plan or not on the plan.

SUSAN: It can be very disengaging to realize that you’re – especially if they, someone thinks that they are your heir apparent, or the heir apparent to a very significant role, and you and your partner have decided that person is really not going to make the cut. Tell us about your situation, obviously without using names, but are there some people who think that they’re in line, perhaps, for a more senior role than you have plans for?

JOE: I don’t think so. I think, you know, if anything we’re probably – one of our struggles going forward is, at least from my perspective, I’m in position of coming in, the other partner’s in the position of going out. So one of my struggles is kind of looking further down the road as to already looking at who’s gonna be the next step for me. We’re small enough that in terms of management roles and taking on those tasks, it’s really just the two of us. So right now, I wouldn’t say we really have somebody in line. I don’t know that I’ve asked anybody, um, and I know that nobody’s approached me, you guys have talked about, you know, employees approaching their managers and whatnot to say that they do have an interest, so I have neither approached them, they haven’t approached. So, right now, no, we don’t really have anybody in the line, if that makes sense.

SUSAN: And how’s your turnover? Have your staff – have they stayed with you for a period of time, or what are you averaging? How long are people staying?

JOE: We have very little turnover. We’ve been in business for – the company has been in business for about 25 years, and we’ve got two employees that have been here for 22 years. Our shortest term employee is a year, but it’s because we just hired them. We really have very little turnover. I think it’s just more a – whether the employees want to go down that path or not, or take on those responsibilities.

SUSAN: Well gosh, congratulations to you. I think you ought to take credit for great management for the fact that people are staying. Well done.

JOE: I had good people ahead of me, and we’ve just got a good group, tight group of people, so.

SUSAN: That is terrific. You know, what I would recommend to Joe is that I do think it makes sense, even though no one’s approaching him or his partner, to at least annually do kind of a check-in, just to make sure folks are feeling valued and appreciated – which I have a sense that they do, or they would not be hanging around. But asking, you know, what are your career plans? And just getting that conversation flowing. What do you think, JoDee?

JODEE: I agree, and I think sometimes, as we said in our earlier podcast, that sometimes leaders or CEOs and owners make the assumption that everyone wants to be a part of the succession plan. They may want to remain with the company, but they might not want to take on a more responsible role or a leadership role. So I think it’s important to always continue having those conversations about what are their goals? What are their expectations? So you can get a feel for whether you’re in alignment with those same thoughts. And what might they need to do, for example, if they want to be a part of the plan or aspire to a higher level, what resources do you need to provide them with? What things should they be doing on their own? Creating those personal development plans to lead people down that path.

JOE:I think that’s great, I think, you know, one of the things we’ve done is maybe made the assumption that nobody wants to step into these roles –

JODEE: Oh.

JOE: – you know, a manual kind of checkup with them to see, and to either confirm or deny that assumption’s probably a good step for us.

SUSAN: I think that makes great sense. And I love JoDee’s point of view about, perhaps they are looking to just continue growing and getting better at what they’re doing, and that might mean that they do need to do some outside class, or maybe there’s just some other way for them to skill build, and in that annual check-in, a great chance to find those things out too. And maybe technology is changing, maybe there’s things in your industry that are changing, and it’s a good time to just make sure the person is staying relevant and current, and what more can we do to keep, keep you as strong as we need you to be.

JOE: Right.

JODEE: Joe, I’m not sure we directly answered your question about, do you tell the employees there’s a succession plan and whether or not they’re on it, but I think this is a way to have those conversations with employees and to talk, even somewhat casually about saying, “We’re planning to grow, or we’re wanting to build a team of leaders, and we want to know what your thoughts are right now,” understanding those plans can change, someone one year might tell you they’re not interested and the next year that they are, or vice versa, and keeping them on track. The track of progression or not. That maybe you don’t see them as taking on a bigger role, and maybe their, their future is not to be with the company.

JOE: Right. Yeah, and I think, you know, we have, like I said, we’re a small tight group, we’re always interacting with each other. I think we – I’ve done a poor job of having those conversations about where you want to go and where we’re going forward. Our conversations typically are about how things have been, how you’ve been performing in the past, and not so much where you want to go in the future, and I think in those conversations is maybe where the reviewing of our plan between me and partners can come out, as well as finding out from them where they plan on going.

SUSAN: I agree, that makes good sense.

JODEE: Well, and then obviously, too, Joe, might lead you down a different direction. For example, if you do find out that none of your employees want to take on this bigger role, what will you do about it then? Who might you need to go out and hire, who is part of your plan to sell, what – you know that can lead you down a whole different path of strategies that you might need to be thinking about.

JOE: Right. Definitely a question I don’t have an answer for.

SUSAN: But you’re asking the right questions, and that’s what’s – that’s what matters.

JOE: Okay, good.

JODEE: Yeah. That’s the key, I think, is to keep asking questions, right? Keep asking of your people, keep asking of the other leaders, what are we thinking about, what are we talking about?

SUSAN: Well, that’s great. Sounds like your company is in good hands, so. Joe, thank you so much for calling in today. We sure appreciate it, we appreciate you listening to the JoyPowered Podcast.

JOE: Thank you.

JODEE: Alright. Thank you, Joe.

SUSAN: Have a great day.

JOE: Alright. You too.

JODEE: Bye.

SUSAN: JoDee, I’m very excited, we’ve got a guest calling in today. This is Lisa Geller, and she’s the founder and principal of Geller Consulting Group. Prior to starting her own human capital consulting firm, Lisa held various global leadership roles within Fortune 100 companies. Lisa has consulted with and coached leaders from North America, Europe, and Asia, and from diverse industries, such as high-tech, manufacturing, financial services, healthcare, as well as the nonprofit sector, and she’s what I consider a bit of a subject matter expert in the succession planning area. So Lisa, I know I gave you just a brief intro, but anything else about yourself that you’d like to share with the audience?

LISA: First of all, thank you for having the opportunity to share some of my knowledge and experience around succession planning. You know, I think that over the last couple years that I’ve been out as a consultant I’ve had the opportunity to work with a lot of small- to mid-sized firms, you know, where a lot of my experience prior to that was in these big, large multinationals, so it’s kind of been interesting working with organizations that are – even the smaller ones are starting to realize that they really have to start putting some time and effort behind making sure they have successors ready for some critical positions.

SUSAN: Oh, that’s great. I bet it is very different from working with very large companies and very small. What are some of the similarities, or maybe differences, between the two?

LISA: It’s the process, probably in the end it’s gonna be the same, but it’s just um, you know, I think a lot of the larger companies have been doing it for a long time, and quite frankly, I’ve been a part of a lot of those organizations and have learned a lot about what doesn’t work around succession planning, and so it’s kind of fun for me now to kind of start with some of these organizations that really haven’t been at it for a long time, but some of the experience I’ve had, I think has really been helpful, because I’ve kind of been at the other end where – thinking about us having this conversation, I was thinking about early in my career.

I don’t know if either of you have had this experience, but we spent a lot of time before we would have these talent review meetings just putting together these huge books of a lot of paper, and – and they would have these succession plans in them, but I have to say I can’t remember ever going back to these books when the decisions were having to be made, you know, or when a position actually opened up, I can’t remember taking those books out and referring to them. So I think – I’m not sure that it’s all that different, but I feel like I’m in a different part of my career where I can really, hopefully, help some of the companies that are just starting maybe avoid some of the mistakes that I’ve been a part of.

JODEE: Yeah. Lisa, what typically is it that spurs someone to call you or to consider getting help with succession planning? I mean I’m thinking of things, like an illness would almost force them into it. Is it common that people kind of are forced into it, or they’re really being proactive about it?

LISA: You know, it’s interesting, I can talk about a current client, you know, without really getting specific, but what I would say is what got them is that their board really started to ask the CEO what he’s thinking about in terms of succession, and, you know, I don’t think the CEO at the time had been really thinking about it a lot, and so they said, well it’d be great if you went ahead and started to really put a process in place, we know it’s a very small agency, that it may not be easy to find some successors, but it’s important that you go through the process and have something in place so that if anything would happen to the CEO or more importantly, as this organization’s going through a significant change in their industry, they really have to be thinking about who would be the future CEO, and even how to start bringing some of that talent that they may need, not only for the CEO position, other key positions, into the organization.

SUSAN: Yeah. I think that makes good sense.

JODEE: Yeah.

SUSAN: So Lisa, what are the most critical elements, in your experience, that should be incorporated in a sound succession planning program?

LISA: I think that I kind of look at it in two really important components. One is really understanding and identifying what the critical roles are for an organization and putting together really clearly defined success profiles, which I can talk about a little bit more, and then the other thing, I think, is really having a well-defined strategy and action plan so that you’re able to fill those positions when you need to.

SUSAN: Makes sense. And so what are some of the things that you learned not to do from those large companies that now you’re incorporating in your practice with businesses today?

LISA: I guess what I’ve learned is, in addition to what I kind of started the conversation out, is that this shouldn’t be a paper exercise, it shouldn’t be a bunch of different templates that you have to fill out, but more importantly is to really understand, what are the most important roles that an organization needs to really be thinking about, because you know, we call them critical roles, right, and we really talk about what are those roles that if they went unfilled or somebody was in them that didn’t have the necessary skills or experiences, the company really wouldn’t be able to deliver the results that they’re really being measured against.

And so one of the things that I think we used to do a lot of is we would often see, one, that perhaps everybody thinks succession planning has to go down to every role or every leadership role or has to go really far down the organization, and what I would say is that at least my belief is that it really just has to be really in place for some of the critical roles, and the critical roles, like I said, can really be those that are really going to drive the execution or the achievement of the company’s strategy, but they also are around some unique skill sets, and – or jobs that are kind of hard to fill because there’s a scarcity of, of talent or competition for the same talent. So I think one of the lessons learned is really pick those roles and really understand what it’s gonna take for someone to be prepared and ready and be successful in that role.

So, you know, I think that really having these success profiles, which really talks about what do people need to know or be able to do, what are some of the personal attributes that they have to possess, and the type of experiences that they should have had prior to taking the role, I think spending time, and I do this now with my clients, to really start to think that through so again, they can go out in the market, now they have the success profile, they can go out and use it to develop their own people, and so I think just saying we need to fill this role but not really understanding what is required to be able to fill the role for not only now but down the road. It’s just an important take away that I’ve had over the years.

SUSAN: Sure. So tell me, when you’re building a success profile, I’m guessing you talk to the incumbent. Where else do you gather your data or information to build these success profiles?

LISA: It’s exactly – you’re talking to the incumbent. In the case of one that I’m working on now, I would say we talked to the board members as well, because it’s a CEO role and so they absolutely have a critical perspective on what it’s going to take, not only, again, to fill the role as it is, but what it has to be in order to take the organization kind of – it’s experiencing a number of challenges – to really kind of meet those challenges head on and remain relevant. So getting that board perspective, but it could be almost anybody who really understands their role, about what is going to be required and what it takes for somebody to be successful in the role, either today or in the near term.

JODEE: Lisa, Susan and I talk a lot about StrengthsFinder, and I have Futuristic as one of my top five strengths, and so I get energized or excited about the thought of strategic planning, but yet in instances where I’ve worked with organizations on it, my experience has been that it scares people. It scares people to think they won’t be the one, or it scares them to think that we need to do this, because what if something happens to me, and I don’t want something to happen to me. I mean, it seems like there’s, there can be a lot of negative feelings around the process. So I’m just curious, what have you observed – or a little bit of both, or is it mostly positive?

LISA: To be honest, I don’t know, and I’m trying to think, cause I’ve been at this a long time, and I would say what I’ve seen a lot more pushback are in a couple of other areas. I could talk to those, but in terms of them – no one ever loves to think about if something would happen to them –

JODEE: Right.

LISA: – who would be what we call kind of the interim or emergency successor, but obviously that’s really important, and unfortunately people could think of times where things have happened, either in their current organization or other times where something did happen and they didn’t have someone, and the business unfortunately will suffer. You know, it’s horrible that something happened to the individual, but you really have to be prepared, you know –

SUSAN: I was gonna say, Lisa, I usually say to people, “It’s not we’re worried about you getting run over by a bus. We’re worried you’re gonna win the lottery and not come back next week.”

JODEE: Oh, that’s a good way to approach it.

LISA: That’s a better way of putting it.

SUSAN: I do!

JODEE: That’s a great way.

LISA: I mean the other thing is that, I’m sure you gals have seen this as well, which is, oh, you know, when you’re doing succession planning, they want to put in one of the people who they like the best, or one of their guys and gals, or one of their favorites, I always call them, and people that are really top performers. But again, it’s almost like, let’s just throw their name down. They don’t often – really have done any kind of assessment, or again, if they don’t have this critical role or success profile in front of them, you really can’t challenge them, right? You can’t say, “Well, why don’t you think this person,” or, “I don’t think this person is the right person,” but now I don’t have anything objective in which to evaluate or critique them against.

So I think that, again, having something that really has been vetted and people realize and understand that there are certain experiences you need to have, certain kind of personal attributes, competencies, whatnot, helps you to be much more effective when you’re looking at potential successors as well as being able to assess them to just see, are they people who are able to step into a role of greater responsibility and scope, and there’s other assessments and, you know, we all know about them, and there’s many more now than there was years ago, around looking at someone’s potential to be successful at the next leadership level.

SUSAN: Sure. You know, what I am interested in, uh, Lisa, and I bet you could shine a light on it, for every single business I’ve ever worked with on their succession plan, I would say most of the critical roles, we find somebody in the organization who we think could be developed. If not in the next six months or – some are ready now, but maybe six months or even 18 months down the road. And we put together an individual development plan and we really work it. We don’t tell the person that you are going to be their successor, but we say we believe you’re – you’ve got high potential, and we’d like to make sure that when the next big opportunity comes along, that you’ve got the skill set that makes you a viable candidate, but there’s always this percentage – and I don’t, can’t tell you the exact number, percentage where we can find nobody inside who would have the success factors that we need, the success profile. So I would love your advice on how early should a business think about recruiting somebody, a talent into the organization and maybe developing them. Is there a magic length of period that you would recommend?

LISA: I do think that – and this is becoming more and more easier to do than it was years ago, but you should be aware of what talent is outside your organization, even when you do have some really great people inside, you should be aware of who that talent is and starting to establish relationships with them. Again, if I go back to the firm I’ve been working with, they have to know that, because chances are they’re not going to have somebody potentially inside the company, and then we’ve talked about when can they bring these people into a feeder position or something else, or because they’re really small they can’t probably just create a role for the person, although, you know we’ll continually challenge them.

But you know, I think the point is is that – and there’s many more research, if you work with a lot of the people who do the research behind talent acquisition, there’s a lot of firms, and there’s a lot of people out there as freelancers as well who can do the research for you to get you to understand what talent is outside in your industry, in those skill sets, that you can start to form, you know, can almost, like when you’re dating, court them a bit, and get them interested in your company, so that when something happens or when you’re able to create a role, you’ve already got a relationship with those people.

SUSAN: I think that makes good sense.

JODEE: Yeah, great idea.

SUSAN: So any other pitfalls or anything else that you think businesses who are just starting out organizing their thinking around developing succession plan that they should be aware of? Anything else that you think is important?

LISA: I think this is one that, again, I’m sure you all would agree that this is not HR’s job. I’m always a big – just like my favorite line is like, yeah HR’s job is not to do the succession planning, it’s to – or to figure out performance management and everything else under the sun, but what HR’s role is to do is to provide managers with the tools and the coaching to conduct this process most effectively, but managers have to own the process and they have to be held accountable for the results. I’m sure when I was inside we set a lot of goals, which I’m really glad we did, because I think it did help us to start holding ourselves accountable for what percentage of jobs we were going to fill internally versus externally, and we held our leaders responsible for those numbers. And, you know, I think that you love to say that encouragement is the only way to get people to pay attention, but sometimes having a number that you put in place and you’re holding your leaders accountable for will really make sure that this process is taken seriously.

SUSAN: Interesting.

JODEE: And Lisa, were your – at least in that particular example, were those numbers of bringing in external people, were those intentional to drive maybe more diversity or more different thought processes or to come from competitors or was it because you knew you might not have the skills and talents in-house to get it done?

LISA: I think it’s actually all those things, so I would – if you asked me why we did that I would tell you it was all those things. I think in some cases, when we first started the process way back when in one of the companies where it was the kind of early days of this, we clearly hadn’t spent the time to build up our internal talent base. So of course, setting the goal at that time probably would weigh heavier on external because we just didn’t have enough of a bench inside or even people we felt that could be ready in the shorter term versus real, real long term, but as the got more sophisticated and we developed much stronger pipeline internally, yeah, we still needed to bring in and we thought it was healthy to bring in people from the outside for those exact reasons, diversity, also sometimes bringing in somebody from a totally different perspective and different type of industry really is what’s needed to help a company kind of look at things differently.

JODEE: I really like that idea of establishing a number or a percentage or a goal around that. I know we have a lot of clients who talk about the importance of promoting from within, which is great, obviously, and you want to be able to create opportunities for your people, but not forgetting that bringing in that different thought, that different industry perspective, the diversity, just new blood in the organization can really be powerful as well and to actually set a goal around that I think is very powerful. I really like that.

SUSAN: I do too. I think it enables the organization to have broader thinking –

JODEE: Yeah.

SUSAN: – and I think it’s very smart. Lisa –

LISA: Yeah.

SUSAN: Oh, I’m sorry –

LISA: Yeah.

SUSAN: Lisa, I was just gonna say, any other advice you have for our listeners before we let you go?

LISA: I think I already mentioned this, you know, a little bit, but it’s got to be a fluid process. That’s how I started the whole conversation. It can’t something you do once a year, you put in a book, you write the success profile, you look at it three years later. It’s got to be a fluid process. It’s got to be at least annually, or if the organization is undergoing any significant changes, then you want to pull things out and start to modify accordingly. So again, it’s really, it’s almost like today they talk about kind of the agile development, whole concept of that in software engineering, but it’s similar with all our HR processes. I think more and more we’re starting to say – or people, human capital processes – you know, we really have got to keep them alive, adapt them, and make them fit to the situation, and real-time, make them relevant.

SUSAN: Good. Lisa, I was going to ask you real quickly, is there any software out there that you use or that you recommend your clients use in this space?

LISA: I would probably say no.

SUSAN: Okay.

LISA: I, you know, I – not that there – look, software, it’s so funny, and I’m sure you all consult on this too, it’s like the whole thing with everything we’ve been learning about performance management, right, and having these very complicated performance management systems. I think the main benefit for having – you know, I think there’s a number of good account management software applications out there, you know, I don’t need to give anybody free advertising, there’s a bunch of them out there, and I think what’s valuable about them is the data, and so as we’re moving towards being able to do, like if we do want to really be able to measure how many percentage of our people, our critical positions are being filled internally, this system obviously is much better than trying to track through an Excel spreadsheet or just counting them when you – after the fact, so I definitely think that they – the best thing about some of the software out there that I’ve seen and there could be some new things and I’m just not aware of, is the ability to be able to have the data so that you can start to see who are we identifying, how often are we actually taking these people who we said were successors, actually getting them into the role that we thought they’d be successors for. So again, I think they’re good for that. They don’t necessarily, you know, are good for the process on itself, right? You know, it’s only as good as the data they put in, and –

SUSAN: Sure.

LISA: – but it’s really getting the process, becoming much more integrated into the way that they’re running their business.

SUSAN: Terrific. Oh, that makes good sense. Well, Lisa, thank you so much for joining us today, you’ve really given us some good information to think about and I know that our listeners will appreciate it. Thank you so much.

LISA: Well, and thanks so much for the opportunity.

JODEE: Thanks for joining us, Lisa.

JODEE: We did get some listener mail on this topic this week, Susan. Tony from Cincinnati wrote in, “I have been working my way up at a large company for 10 years, and although I don’t manage others yet, I believe I may get a chance to do it in the near future. I’ve heard my manager make a few comments about talent planning and succession planning when an opening occurs, but he’s never talked to me about it directly. How do I find out if I’m part of the discussion and if I’m on the radar for promotion? Is it fair for me to just ask him directly?”

SUSAN: Tony, I would! I would sit down with my manager and maybe if you’re doing regular performance check-ins, or if you have an annual review process, or however it is that you sit down and get a chance to talk about your own career, I think it’s more than fair to say, you know, I know the company has a succession planning process in place and I’d love to know am I on the chart? Am I somebody that you are grooming for future? And if your manager says, gosh Tony, I – no, I hadn’t even thought about that, Tony, you get a chance to say, I want to be part of it. Let’s talk through, what do I need to do? How can I really build my skill set so that I am in line for future promotions?

JODEE: And that’s – I mentioned earlier, Susan, about the company can make assumptions. I think that happens sometimes that we assume, or I’ve heard other people say before, “Oh, I don’t think she’d want that.” or, “I don’t think he’d be interested in that.” But are we really having those conversations with people to find out, or, in the case with Tony, are we as individuals forcing those conversations by asking the question?

SUSAN: That’s great. I used to work for a large global organization, and I would often hear in these type of discussions, “Oh, she wouldn’t move.” And I’m like, have we talked to her about that? Maybe she would for the right job.

JODEE: Right. And maybe if she wouldn’t have moved two years ago, something in her family situation has changed and now that would – she would be interested now.

We have another letter on this topic from Deborah in Indianapolis said, “I work in a family-owned business and the owner is reaching an age where I think she is getting ready to retire. My fear is she will sell the business and we may all be out of work. How do I get her engaged in thinking about having a succession plan put together?”

SUSAN: Wow, Deborah, um, you know, it could be she’s got a succession plan, but you don’t know it. Um, I do – I’d schedule time with her. I’d bring her a cup of coffee, sit down, and say listen. I love my job here, and I know – I love this company and I want to talk about the future. Um, do you have a succession plan in place? What are your thoughts for the long term and, you know, see what she says. And that might just be what prompts her to start thinking about it. My guess, is she probably has but maybe hasn’t done it formally and, um, clearly there’s a whole world of consultants out there that can help you with this topic if it’s a small company, or maybe the HR Director there has some experience or expertise in it.

JODEE: Right.

So please tune in next time. Thank you for listening today. If you have missed any of our podcasts, you can catch all episodes for free on iTunes or Podbean or Google Play by searching on the word JoyPowered – all one word. If you have questions on any HR topic you can call us at 317.688.1613 or give feedback on our podcast via our JoyPowered Facebook account or on Twitter @JoyPowered. We welcome listener questions and comments.

SUSAN: Thanks so much.