“Most company directors greatly underestimate the difficulty, time, and cost associated with CEO and C-suite succession planning,” according to Scott Saslow, the founder and CEO of The Institute of Executive Development. The Institute’s 2014 Report on Senior Executive Succession Planning and Talent Development Search in partnership with Stanford University found that most companies center succession planning to reduce risk such as reduced credit ratings rather than to find the best successors. But both can be accomplished through thoughtful succession planning.
Finding the right talent may come at a price, but so does finding the wrong candidate. A comprehensive retained search can take 100-300 hours plus to complete, however the turnover cost of a key position is as much as 300% of a person’s salary when factoring in lost productivity, training and development costs, recruiting costs, customer perceptions, and more.
Rather than pay the price for the wrong candidate take these steps to ensure success when completing a search as part of your succession planning:
Establish a Phased Process for Candidate Selection
The hiring process is much more than just an interview and a background check! To find the right fit for your organization include psychological and leadership assessment testing. This testing can narrow a large field of candidates to produce ones with a management style fits that fits the company culture. When you get closer to interviewing candidates, prepare your team to gather a wide range of perspectives. Included in the team should be both people that the candidate will be working with as well as interviewers trained in asking behavioral event questions. This may take 2-3 rounds of interviews before the final evaluation and selection occurs.
Have the Candidate Develop a Plan
During the interview process, ask candidates to develop their thoughts on how they would like to tackle the first three to six months in their role. This should be done in later rounds of interviewing to give them an opportunity to learn about the organization. They are not going to have all of the answers, but it will give a glimpse into their vision. In a recent study by McKinsey & Company of C-suite executives, the respondents that were most successful in their transition identified that their most important activities as they began their role were identifying a shared vision and mobilizing teams for this shared vision.
Create a Comprehensive Onboarding Plan
Most executives need at least 100 days to feel fully comfortable in their new role (McKinsey & Company). Immediately after hiring your new executive, provide one-on-one time with other executives to discuss what they are learning and what questions they may have. Use this time to create a personalized on-boarding plan that includes:
- Basic traditional company orientation
- In-depth orientation including history, cultural norms, strategy and planning expectations
- Development of key internal and external relationships
- Learning about organizational practices and systems
- Identification of key initiatives
- Individual and team goal setting
- Planned reviews after three and six months to review progress