By Lizzie Allen
Most organisations understand the critical role leaders play in driving business success; however, even in 2024, decision-makers are still selecting leaders based on ‘gut feel’, existing relationships, and tenure. This tends to focus on trying to please most people (and ruffle the fewest feathers) and can be biased towards those who have naturally outgoing personalities. Unfortunately, this means that quiet achievers and natural coaches who get their jobs done without fanfare are often missed for leadership roles. It also means that decision-makers are identifying future leaders without considering whether these individuals are likely to be good leaders or even want to be leaders. Since poor leadership impacts performance, culture, productivity, and, ultimately, the bottom line, decisions around who is (and isn’t) promoted into leadership positions is crucial.
The negative impact of bias on organisational culture
Allowing bias to creep into promotion and succession planning decisions is a risky move. Ultimately, it leads to the selection of less effective leaders who may not have the required capability, motivation, or leadership potential. Bias can also result in businesses going to market to find new talent when they simply don’t need to. Failure to think openly about talent results in missed opportunities for high-potential individuals who are already within the organisation and have a genuine desire to lead. This can translate directly into a lack of diversity and innovation within leadership teams and can be costly. When the right leaders are not in the right roles, overall business performance can start to erode quickly. These individuals may struggle to meet the demands of their positions, leading to poor decision-making and ineffective team management.
Unfortunately, negative impacts often extend to organisational culture and productivity. While it’s commonly believed that people quit because of their bosses rather than their jobs, the reality is more nuanced. Factors such as lack of career growth, poor job fit, and insufficient recognition play significant roles in why employees choose to leave. Ineffective leadership can also lead to decreased employee morale, and a lack of engagement, both of which have negative impacts on commitment and turnover. Without effective leaders to guide and empower their teams, productivity suffers and the organisation may fail to achieve its strategic objectives.
The role of evidence-based succession planning
Succession planning, particularly for people in leadership positions, is crucial to ensure that key roles within a company are not left unoccupied for long periods or filled by individuals lacking the necessary capability and job alignment. For instance, the CEO position is undoubtedly critical, yet a global survey revealed that 53 per cent of companies lacked a CEO succession contingency plan. Despite this, another survey found that only 21 per cent of human resource (HR) professionals reported that their organisation had a formal succession plan, while an additional 24 per cent had an informal plan. This indicates that more than 50% of the organisations surveyed do not have any succession plan in place.
Evidence-based succession planning equips decision-makers with real, objective insights about their people, letting them make choices that align with the business’s long-term goals for sustainable growth. This integration links the development of future leaders directly to the strategic direction of the business, preparing leaders who are not only capable but also aligned with the company’s future direction
In real terms, this means no more finger-in-the-air decisions, no more ‘he’s my mate’, and no more captain’s calls; only informed decisions that draw on evidence about what their people possess and what the organisation needs. By determining and designing objective criteria for leader selection based on organisational needs, evidence-based succession planning ensures that the chosen leaders possess the necessary capabilities and motivations to drive the business forward. This approach means that the best-aligned individuals are in place to meet specific challenges and capitalise on opportunities.
This all sounds great, but where do we start?
Effective leadership succession planning relies on two key preconditions: cultivating a culture of leadership development and identifying critical roles.
Effective succession planning and long-term leadership development requires a strong commitment from senior management, including the C-suite. Senior leaders need to actively sponsor and drive activities that help potential successors develop leadership competencies. A good place to start is by identifying critical roles, for example, positions that, if left vacant or filled by an unsuitable candidate, could expose the business to risk and cause harm structurally, commercially, and operationally. Identifying these roles creates priorities and a sense of urgency to put a plan in place. roles are identified, you can progress with a strategic leadership and succession approach.
There are four steps you can take to achieve this:
A long-term approach to succession planning begins with adopting a shared mindset toward developing people across your organisation. This means implementing regular development programs where employees can self-nominate for training and take on diverse tasks or challenging assignments beyond their usual roles. Giving people the chance to grow, as well as learn from others, provides wide-reaching benefits such as improved performance, higher engagement, and greater job satisfaction.
Step 2: Identify potential
Development programs are a great place to start identifying those with leadership potential and motivation, as well as suitable candidates for other critical positions. From here, you can implement formal evaluations of potential on a cohort basis, small group basis, or individual self-nominated basis. Using experiential development centres and simulations offers an engaging development experience, as well as the opportunity for objective measurement of potential, motivation, and readiness for future roles and responsibilities.
Using data to drive targeted development initiatives is the next step. This stage involves further developing those identified as having strong leadership potential, building on their strengths, and finding ways to close their skills gaps. This can include exposure to challenging projects, 360-degree feedback, coaching, mentoring, and other developmental activities such as action learning. Involving them in critical business operations as part of their development significantly contributes to fast-tracking their experience and learning, ultimately increasing readiness and the chances of success.
There are a wide variety of tools now available to help you keep track of your talent and potential successors in your organisation. A succession and leadership plan is not a static document; it is always evolving and should be updated regularly based on internal moves, career conversations, completion of development activities, and new hiring decisions. Whenever a critical role becomes vacant, you can make a succession decision more easily and implement an onboarding program with clear targets to help the individual get up to speed quickly. It will also be clearer whether you have the right person available to fill a role or whether you need to look externally.
Having plans in place keeps us ready to make decisions, but it doesn’t futureproof us from all challenges or prevent some turnover. It’s important to understand why turnover occurs each time and to consider this in light of the strategies implemented. There will be opportunities to refine and enhance the strategy along the way.
How Right Management can help
Identifying the capabilities, motivations, and aspirations of your people takes time. We can support this through providing evidence-based measures of potential and performance, including experiential development centres and experiences designed to engage and motivate. We also offer structured individual programs that help people build self-awareness, define career goals, and develop strategies for their own development. We aim to ensure that great talent stays with your organisation, and you maximise opportunities to engage and develop your people in ways which are aligned with current and future needs.
Contact us today to find out how we can add value to your succession and leadership planning.
About the author
Lizzie Allen is the general manager of Right Management Australia and, for 20+ years, has supported organisations across Australia in career development, career management, and coaching. She leads a dedicated team that supports workers at all stages of their employment lifecycle. When she’s not at work, you’ll find Lizzie on the ski slopes, in the garden, or sipping a G&T with her two fabulous daughters.