'Long View': Why are assessments important in organisational succession planning?

In the age of fluid/digital workplaces, it is essential to protect companies from various disruptions, and this is where succession planning comes in, to ensure the continuity of the business by building a pipeline of leadership.

A strategic succession plan allows an organisation to prevent transition challenges and maintain a competitive advantage. Also, by looking within for high-potential talent, organisations can build a sustainable talent pool, reduce hiring costs, and increase employee retention.  

“Board members pursue succession planning to diversify or balance the composition of the board, gain a new perspective with new members, replace dormant members or improve the expertise of the committee and fill skill gaps. Their template reflects the needs of both current and future organisations and board members. It also encapsulates the continuity and sustainability of the performance of the company. Succession planning is a means of maintaining the quality of the board,” says Siddhartha Gupta, CEO at online talent assessment company Mercer|Mettl.

However, certain businesses are not receptive to leadership succession - either to avoid facing retirement problems or to allow the younger generation to take responsibility.

“The business is the only obvious loser in any case,” says Gupta.

Gupta says depending on the nature, each business structure requires a different type of succession plan, as traditional succession planning no longer applies to fluid organisations today.

“Succession planning for key leadership positions after the ‘Great Resignation’ should include cross-functional cooperation and flexible work as critical parameters. This should be followed by coaching and mentoring, which is imperative for the development process. With remote working becoming mainstream, non-linear career paths are increasing. This requires the leaders to be more inclusive and open to diversity of thought, culture, working styles and so on. Being agile to the changing demands of today’s workplace is crucial."

Therefore, as per Gupta, assessments should be the basis for succession planning as it can identify high-potential talent, and eliminate bias in the process, both validating decisions and galvanising a talent pipeline.

In an interaction with People Matters, Gupta talks about challenges that organisations face while creating a pipeline for C-suite leaders, ways to deal with these, and why assessments play an important role in succession planning.

Here are edited excerpts

Why are assessments important in succession planning?  

Succession planning starts by constructing a successor’s profile. This includes mapping the competency framework, skills, and ethos required for the position. This is followed by assessing the potential of the existing talent pipeline and comparing it with the required successor profile.

Since the potential is inherent, it can only be revealed through a data-driven, scientific and objective process of assessments. Therefore, the role of assessments in succession planning is to ensure credibility, and legitimacy and eliminate bias.  

Additionally, assessments can be used to identify high-potential employees within the organisation, and this is essential for building an internal talent pipeline for succession. The benefit of an internal prospect is that they do not need to go through the familiarisation process. From an organisation’s perspective, recruitment is always more expensive and challenging than nurturing and developing internal talent. Also, creating an internal pool of potential leaders ensures employee loyalty and commitment.

Hence, it is fair to say that assessments are the basis on which the succession planning process is built.  

What is the role of assessments in hiring C-Suite leaders?

Assessment suites for C-suite leaders are built on demand as each organisation has its own ethos and needs. A complex approach is needed to evaluate potential C-suite leaders as there is a low margin of error.  

The first step is to predicate and analyse the skills and values required for such leadership positions through assessments. Then, a competency framework needs to be developed that is contextual and nuanced. It also includes information from relevant internal stakeholders about organisational history and its business imperatives.  

Intangible parameters such as psychological profile, personality fit, etc. also need to be evaluated. Real-life scenarios, role play, group discussions, case study simulations, etc. are used for this purpose.

Another critical point to be considered is that for C-suite leadership assessments, you need experienced and qualified assessors who are the right fit.

Thus, assessments provide legitimacy, authenticity, and transparency to the process of hiring C-suite leaders.

What should be the parameters while hiring C-suite leadership?  

If one were to make a list of few aspects for hiring C-suite leaders, then it would include the following:

Adaptability: A leader should be capable of adapting to any kind of situation. They should be able to measure a situation correctly and respond accordingly.

Inclusive Leadership: If you are hiring for C-suite posts, openness to diversity and a more inclusive leadership is the most important aspect to look out for.

Intellect: Strategic and critical thinking are essential for a leader. A leader should be able to think long-term and take a wider perspective while setting priorities. He/she should be objective and take a data-based approach to decision making.  

Learning Orientation: Leaders should always be on the lookout for new learning opportunities and should be flexible in their learning approach.  

Navigating Ambiguity: Ability to handle unclear or unpredictable situations is necessary for any leader. Also, they should be able to manage their work without having all the necessary details.

Stakeholder Management: Building a network of professional and personal relationships is a crucial part of being a leader.

Culture Fit: The most important parameter for identifying a C-suite leader is to evaluate if the candidate is culture fit or not. The career path and ethos of a potential successor should be in line with the organisation's vision.  

What are the challenges while creating a pipeline for C-suite leaders? How can such roadblocks be avoided?  

One needs to realise that there is no ‘one-size-fits-all’ approach to implementing a succession plan. Therefore, producing a succession planning process that fits within the structure and vision of the organisation is a challenge.  

The major roadblock while creating a pipeline for C-suite leaders is dealing with the perceptions and biases of stakeholders.

Board members often have different perceptions of themselves or the potential candidate when it comes to succession planning. Hence, ensuring objectivity, neutrality and removing bias while appointing a successor is a challenge. Additionally, finding an assessor who would be experienced enough to understand the context and the complexity of the task is also a challenge.

Hence, organisations need to invest time and effort in establishing a framework of critical leadership skills/competencies in the larger business environmental context. This involves systematic efforts from top management and subject experts who can help build the framework with other relevant stakeholders within the organisation.  

Further, an integrated talent management process needs to be constructed. This process should encapsulate organisational needs, individual aspirations and motivators of potential leaders.

Only when all of these are well aligned with each other, can the organisation have a clear view of the potential leadership pipeline and how it can be further developed.