Succession Planning Best Practices

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01
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Part
01

Succession Planning Best Practice: Tech

The four best practices for succession planning used by tech companies are preparing as early as possible, assessing performance and potential, commitment from the CEO and board of directors, and having regular talent reviews. We have outlined their details and related case studies below.

Succession Planning Best Practice

1. Prepare as early as possible

  • Overview: Succession planning should be done early to avoid challenges when a leader leaves unexpectedly. Also, succession planning should begin as early as five years before the exit of the current CEO.
  • Example of a tech company and how it is used: Apple applied this best practice. Steve Jobs employed this succession plan when he introduced the Apple University in 2008.
  • Part of the University curriculum includes leadership courses whereby Apple employees are thought to think like the founder and learn to make decisions. Apple uses the digital curriculum as their succession planning, a great example of how technology can be used to prepare a company’s leadership succession.

2. Assess performance and potential

  • Overview: Another best practice for succession planning is to assess performance and potential. It is done not on past performance, but using a variety of effective ways to evaluate potential with relevant and consistent criteria.
  • Example of a tech company and how it is used: This was applied by "IBM where successful planning was made right by establishing great professional development pathways, creating a thriving and positive company culture & allowing candidates to compete at the same level."
  • "IBM made an excellent example of internal succession planning when the current SVP, Virginia Rometty, would be taking over as the company’s first female CEO when Samuel J. Palmisano retires. IBM chose its new leader based on merit."

3. Commitment from the CEO and Board of Directors:

  • Overview: Succession planning should not be confined to the HR department; instead, it should be led by an organization's top leadership (that is, the CEO and the board of directors). Commitment from the CEO and the board of directors ensures that the process gets assigned the right time and resources to ensure its success.
  • Example of a tech company and how it is used: This best practice was applied by Apple, where Steve was also working hard to prepare Tim Cook for the position of CEO. On the other hand, Cook took on a variety of different operational roles, including manufacturing, distribution, sales, and supply chain management before working directly with Jobs to gain experience in the CEO role.
  • An excerpt from the resignation letter of Steve Jobs reads as follows: "as far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
  • Tim Cook also shared his view on succession planning, saying, “I see my role as CEO to prepare as many people as I can to be CEO, and that’s what I’m doing.”

4. Have regular talent reviews

  • Overview: Having a regular talent review is another best practice for succession planning. It involves the board reviewing talents with the CEO, the CEO reviewing talents with the executive team, each executive team member reviews talent with their teams, and the process cascades down throughout the organization.
  • Example of a tech company and how it is used: This best practice is applied by Wipro where the company’s succession planning follows structured talent review and planning process every year, which helps them build a pipeline of talent for succession to key roles. Wipro considers aspects for succession planning such as the strengths, areas of development as well as the aspirations of members of their leadership teams across the organization.
Research Strategy:
We commenced our research by looking for pre-compiled information on succession planning best practices for tech companies. We searched through websites like TD, CIO, and Forbes. Research results showed some best practices of succession planning in general. We then moved forward to identify tech companies that have applied each of the best practices. To do this, we searched through sources such as TechnologyAdvice and Businessworld. We were able to find some information on tech companies applying and using those best practices for successful succession planning and have summarized the best practices found in the section above.
Part
02
of two
Part
02

Succession Planning Best Practices: Media

Some of the best practices in succession planning in the media space include early preparation of succession plan, commitment from CEO and board of directors, mentorship of the potentials, among others. Below are the details of our findings.

EARLY PREPARATION OF SUCCESSION PLAN

  • Succession planning should be done early to avoid challenges when a leader leaves unexpectedly.
  • Succession planning should begin at least 5 years before the exit of the current leaders in an organization.
  • Early preparation of succession plan helps to ensure a smooth transition in the company.
  • According to Facebook, early planning of succession helps to avoid disruptions in the company.

COMMITMENT FROM CEO AND BOARD OF DIRECTORS

  • The top leaders in an organization should be the main initiator of succession planning (such as the CEO and the board of directors).
  • Commitment from the CEO and the board of directors help to ensure proper action of the succession process.
  • Also, the top leadership have a better understanding of the organization in terms of resources, talents, and culture, and well-positioned to effectively oversee succession.
  • According to Apple (tech/media company), succession planning is taken seriously and requires the commitment of the top leadership.
  • According to Tim Cook, he reported that one of his responsibilities is to groom as many successors as possible and let the board of directors make a decision at the right time.

REGULAR TALENT REVIEWS/IDENTIFYING REPLACEMENTS

  • Possible replacements within the organization should be identified. This requires a regular review of the current employee's skills and capabilities.
  • For technology companies, identifying possible successors who possess both IT and leadership skills would be ideal.
  • In the talent review process, it is important to identify and hold discussions with individuals who might have the best talent for the position.
  • Talent review is essential in every organization.
  • To cast a wider net in the talent review, the process should take a systematic top-down approach in which the board reviews talent with the CEO, the CEO reviews talent with the executive team, and each executive team member reviews talent with their teams.
  • According to Facebook, it was reported that Mark Zuckerberg is keen on conducting performance reviews as part of the succession plan, to ensure that team throughout Facebook are not slowed down by change of roles or exit of employees.

MENTORSHIP OF THE POTENTIALS

  • Mentoring the potentials involves the cultivation of skills and capabilities of possible workers who may be suitable candidates to fill a vacant position.
  • To avoid the possible offense of raising the employees ‘expectations, mentorship of potentials should be done subtly such as in the form of more responsibility, challenging tasks and exposing employees to more learning opportunities.
  • It involves committing time and resources to the development of potential candidates through training, capacity building sessions, motivation workshops, among others.
  • Such activities allow the potential to grow and develop experience and skills to the extent that they can fit into the shoes of the "existing executives."
  • According to Apple, it was reported that the CEO is keen on mentoring the possible successors so that when the time comes for his exit as the CEO of Apple, the possible candidates are ready and suited for the job.

TESTING LEADERSHIP METTLE

  • A succession plan should allow leaders to test potential successors' leadership skills by allowing them to tag along on top meetings and asking them tough questions to get their perspective.
  • It involves having potential successors to prove their worth and suitability for vacant positions through various forums.
  • Getting involved in sessions and meetings with senior executives allow them to interact directly with decision-makers who get a chance to determine whether the potentials are up to the task.
  • According to Google (tech/media company), possible candidates are tested before being appointed to positions.

INTEGRATION OF SUCCESSION PLANNING INTO ORGANIZATIONAL PROCEDURES.

YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY

To address the research request, the research team scoured through various industry publications and media articles that provide related information on succession planning for media companies such as Business Insider, CNBC, among others. In the course of our search, we were able to identify the best practices that were common across multiple credible resources and authored by experts in the field. For each best practice, we identified media or tech companies that have implemented the practice successfully.

Also, we ensured that all the articles utilized in this research were written by industry experts and authors. We then corroborated the information across multiple sources. Since the articles were written by experts, we were able to conclude that the practices identified in this research are the "best practices". Also, all the best practices identified are the most mentioned across various experts publications.
Sources
Sources

From Part 01
Quotes
  • "IBM chose their new leader based on merits and looked internally at candidates as well. This demonstrates an understanding of transparency that supports and adds to the robust company culture they have in place."
  • "Before he stepped down as CEO of Apple, Steve Jobs prepared his succession plan in the form of Apple University. Founded in 2008, Apple University has a leadership curriculum with content and materials based off of Job’s experiences. "
Quotes
  • "One of the greatest pitfalls of succession planning is the habit of ignoring it until it’s too late. It’s tempting to put off making preparations until you absolutely have to, but sometimes departures can be very unexpected. To avoid being left in the lurch you should start planning early - even up to five years before you think someone may leave."