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25

AUG

2017

Succession Planning: the lessons from politics

Bobbi Ryan

The political demise of Labour Party leader Andrew Little and the ascent of his deputy Jacinda Ardern into the top job was a surprise twist only weeks out from this year’s General Election.

Leadership change in politics can be messy and it’s usually very public. But what can business learn from succession planning - or the seeming lack of it at times - in politics?

The Labour change appears to have given the party new heart and fresh energy but it’s a huge challenge for Ardern this close to voting day. Should she lead a win by the opposition parties it will be a major triumph, masking the fact that Labour has had a disastrous sequence of leadership flip-flops since Helen Clark’s election defeat in 2008. Ardern is the fifth new party leader - after Phil Goff, David Shearer, David Cunliffe and Little - since Clark relinquished the role.

By contrast, National’s long-standing and successful leader John (now Sir John) Key elected to step down nine months from the Election and a relatively painless transition to his deputy Bill English followed.

But politics is a funny game. Every three years the New Zealand public decides who gets to keep the reins of power and it’s not always a wholly rational outcome. It’s as if the customers get to vote on which business they’ll buy from for the next three years. And leadership is a major factor in the decision the voters make - style and personality count for a lot. There’s a lot on the shoulders of the main person on the billboards.

In politics, deputies don’t always make great leaders; often they’re on the ticket to provide a balance or contrast. English was Key’s Finance Minister and had a relatively low profile - a safe set of hands behind the scenes - and he’s had to adjust to much greater visibility that accompanies the PM’s role.

The talent pool for political parties to pick leaders from is limited to who’s in Parliament at the time, which makes it all the more important to be thinking ahead. There are plenty of opportunities to manage that through candidate selection, party list ranking, allotment of party or select committee responsibilities or associate spokesperson (or Ministerial) roles. Elections regularly bring a wave of fresh talent into the House and a weeding out of the less promising or capable - though a major defeat can deplete a party of both excellent and mediocre MPs.

Business aren’t so exposed, of course, unless perhaps it’s a listed company and things aren’t going well - at which point shareholders may seek action over leadership performance issues. But generally, leadership deficiencies are not openly obvious and can be managed.

Leaders do move on, often unexpectedly, however, for a range of reasons - better roles or salaries or sudden health issues, for example - and gaps at the top can open up. In the commercial world, that can disrupt business continuity and momentum and may erode morale - especially if a logical replacement hasn’t been identified previously. External recruitment to fill the gap draws on a significantly larger pool of talent but can be a prolonged and costly process; the new appointee also has to understand and adapt to the culture before things get humming again. So there are major advantages in having an internal succession plan in place.

For larger organisations, particularly with several divisions or subsidiaries, succession planning isn’t usually an issue; there is ample talent within the organisation to rise into the top roles. But many businesses are much leaner and the gap between the waiting talent and the top roles can be wide. How do you take your talent to a point where they can comfortably step into the higher roles? That’s a training and development issue: you need to help those individuals bridge the gap.

That can be done in four ways:

  • You can move them into another functional area to develop the skills and gain the experience they need.
  • They can be assigned to projects that provide, for example, strategic planning or mergers and acquisitions experience and learnings.
  • You can promote them to the more senior role, while providing additional support to coach and train them in the new disciplines.
  • Or the individual can take control of their own career and bridge the gap by leaving the organisation to work for a smaller company in a more senior role - and by doing so, will position themselves to come back to larger organisations at the next level up.

Cross-functional training is increasingly the way businesses can solve that succession gap dilemma. Career paths used to be linear but now a zig-zag path is perfectly acceptable. For smaller businesses, cross-functional career advancement is also a way for them to compete with bigger businesses.

Talented staff will be targeted by other organisations, however, and businesses wanting to hold onto their talented managers need to ensure the salary packages they offer are competitive. Businesses invest a great deal of time and money into developing staff, but that money is wasted if you stint on remuneration and the talent gets lured away by a bigger pay packet.

Good development planning and career pathway definition for your talent will help stave off the temptation to move on. For that, you need to understand both where they have the aptitude to progress and where they want to progress.

What’s the role of the incumbent leader in all of this? They have to be involved in the discussions around who could take over from them, but it shouldn’t be their exclusive call. It’s important that they allow their successor to have some profile, particularly when the succession date (if it’s known) gets closer. They need to be willing to share the limelight to help possible successors develop their skills and profile, on the understanding that, in most cases, doing so will enhance their own reputation.

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