Succession planning is key for business continuity and risk management. Naming a new CEO or hiring a manager is at the end of a process, and a consequence of the work done. To call it a “game plan” would be somewhat misleading, as that implies an immediate time frame. Long-term succession planning is a strategic, ongoing initiative of building your “bench” – a collective of future leaders – through talent development, training and recruiting. And this challenge is particularly prevalent in the Asia Pacific (APAC) region. 

Prudent leadership has supercharged APAC’s weight in the global economy in the past two decades – the region’s share of global GDP has increased from around 27% in 2000 to around 37% in 2021.  The region is further expected to contribute to nearly half of the entire global economy’s growth by 2040, driven mainly by the growth of Chinese, Indian and Southeast Asian businesses. With McKinsey estimating that as soon as 2025, 25% of the APAC population will be Gen Z, the next few decades will see a new generation take the reins for continued APAC ascent in the global economy. 

With this much responsibility on the shoulders of the next generation, what are then, the considerations that teams responsible for grooming or finding a business’s next-generation must bear in mind when kickstarting that process?

Planned career development

Progression within a company is an imperfect science. Planning ahead of time informs succession planning because clear pathways to leadership positions align employees’ wants with their companies’ needs. Conversely, the ambiguous opportunity to “climb the ladder” leaves many unanswered questions for all parties. When firms are grooming someone for a specific role, they have to measure and reward performance more effectively. Meanwhile, the employee knows what the end goal is, what their trajectory looks like and is imbued with a stronger sense of purpose, progression and trajectory, without having to look for greener pastures elsewhere. The individual is aware of “what’s in it for them” and it ties in with what matters to the wider business.

Targeted peer reviews

For a long time now, leadership teams have used peer reviews to discuss and determine promotions. These sessions still hold water today. However, for companies operating in dynamic industries amidst the backdrop of challenging economic and geopolitical conditions, the peer review’s function has evolved. Instead of adopting a companywide approach and establishing a pathway for every employee, businesses are honing in on a few key leadership roles and reverse engineering their personnel, talent pipeline and recruitment to identify and invest in the right people for those roles. During this process, it becomes clear which positions are most critical to a company’s success. Those are the positions to prioritise when building a company’s bench.

Objective success profiles

A comprehensive success profile for a given leadership role can provide keen insight into succession planning by reducing the inherent bias in peer reviews. Often, managers are rating employees on intangibles rather than objectively evaluating their potential to advance based on clearly defined key performance indicators (KPIs). Success profiles provide the outline to match core competencies and behaviours with dedicated responsibilities that help the company succeed, which can help streamline the talent search. Specificity and objectivity are a powerful combination for any business that wants to shape its future leaders.

A new perspective of potential

High performance and high potential do not always go hand in hand. An employee’s performance confirms their ability to fulfil their current role, while their potential suggests their capability to excel in an expanded role. With stark shifts in the way people work and teams collaborate, some traditional indicators of high potential, such as agility, are now baseline qualifications across the board. Other qualities, such as empathy, have emerged to redefine leadership. In the context of succession planning, high potential is no longer a search to find a carbon copy of the incumbent in said role. It’s an opportunity to reset and reconsider how emerging leaders’ unique skills and diverse backgrounds will not just sustain, but reshape, a business’s future and its ability to thrive in a new paradigm. 

Commitment and balance

Where is the business headed, what skills does one need and does the business already have key players who are ready to become leaders? These questions raise even more questions. Solutions might lie in internal promotions, new hires or a combination of both. In any case, succession planning requires serious time, effort and resources. Many businesses procrastinate for years while dealing with day-to-day concerns and by the time they come around to it, the bells might already be tolling.

Identifying even a select few future leaders can be a large and resource-intensive endeavour. Many companies end up turning to headhunters – or executive search and consulting firms in today’s parlance – to provide the tools, programs, counsel, insights and quality candidates that enable business and succession planning success. Businesses should not lose focus and get lost in the weeds trying to unearth a like for like version of the modern-day Lionel Messi or Lebron James. Instead, they should allocate adequate resources to build a solid foundation and focus on grooming the next Luka Doncic or Kylian Mbappe.