- Human Capital is CEO’s top business challenge for the 4th year running. It’s at the top of everybody’s list. If it’s not at the top of yours, you’re already behind. CEO’s say failure to attract/retain top talent and developing next-gen leaders are their top two hot button issues. Succession planning addresses both. (Conference Board, 2016)
- Less than half of surveyed executives (44%) say their companies are ready to meet future leadership needs. That means if your company is average (or even above average), you’re not ready. (Global Human Capital Trends, 2016).
- Promoting leaders from within has a success rate of 70-80%. That success rates drops to 50-55% for external leadership hires. Succession planning and growing your own means you can do better than flipping a coin. (Global Leadership Forecast, 2014-2015)
- Unplanned succession is expensive! The cost of an unplanned CEO departure can be as much as 100x that leader’s salary – 10x salary is a fair estimate for the cost of senior leadership turnover in general. Refer to #3 and think about what improving your odds through intentional succession planning can do for your bottom line. (source)
- Even though unplanned succession is expensive, and external leadership hires are more likely to fail, only 10% of leaders rate their companies’ succession programs as excellent, and 51% rate their succession programs as weak or say they don’t exist. Again…if you’re average (or even above average), you’re not ready. (Global Human Capital Trends, 2015)
- Only 27% of leaders feel “very prepared” to create an optimal workplace where people can deliver their very best. These are people who are already in leadership positions. They’re not ready to grow your next gen leaders…and if they’re not ready, how ready are those next-gens? (Global Human Capital Trends, 2015)
- Millennials are the leaders of the future, and 53% aspire to become executives. But only 6% of companies reported they had “excellent” programs in place to develop Millennials in 2015 (Global Human Capital Trends, 2015). In 2016, only 7% of companies had accelerated development programs for Millennials, but 44% said they were making progress on development for Millennials. If you’re not making progress, you’re behind (Global Human Capital Trends, 2016).
Maybe you’ve started some work on succession planning. Maybe you haven’t. It’s never too late to shift your focus and increase your rate of progress. If you’re behind now, make progress on succession planning and leadership development a priority for 2017.
It’s not brain surgery (although health care leaders should devote special time and intention to succession planning!). Our next blog post will offer some straightforward steps you and your organization can take to maximize the leadership potential of your employees, with a clear focus on achieving great business outcomes.
This post is the first in a series of three. Next up: Who Will Be Leading Your Company in Ten Years? and Avoid These 4 Mistakes to Find Your Best Next-Gen Leaders.
Kim Turnage, Ph.D. works as a Senior Leadership Consultant for Talent Plus, helping leaders select the best people, develop those people through a focus on their strengths and create talent-based succession plans that will drive the future growth of their organizations.
She writes regularly on leadership and everything that goes along with it. Find more of her work here.