Building a stable C-suite leadership pipeline of internal candidates is a growing responsibility for boards who are expanding their oversight responsibilities from traditional succession planning.
The reasons are easy to understand. Business is changing faster than ever before, and so are the chief officers who increasingly remain in their positions for shorter periods — sometimes as little as three to five years. Some C-suite executives leave their positions within the first year — the result of misalignment, lackluster performance or cultural dissonance.
The cost of these departures is high. How an organization deals with quiet quitting, resignations and terminations in a volatile talent environment will shape its reputation and growth trajectory for years to come.
Moreover, how a board orchestrates C-suite leadership development and progression versus succession will affect strategic outcomes and pave the way for ongoing business success or lackluster performance.
C-suite leadership development is a marathon, not a sprint. Understanding C-suite progression as a long game ensures stability, continuity and calm at the time of an executive transition.
Cultivating clusters of potential C-suite executives before a sitting chief officer departs allows an organization to manage employee angst and avoid major disruptions to business performance.
C-suite progression planning is a practical, workable alternative to C-suite succession planning. It offers an extended, ongoing process that focuses on candidates across generations, organizational levels and backgrounds.
In a progression planning approach, an organization typically assesses professionals at every level as potential C-suite executives — either for short-term projects or long-term opportunities.
The approach views the development of executive talent as a reflection and confirmation of organizational purpose, vision, values, culture and DNA. It curtails panic and knee-jerk decision-making. It can commence on the first day of a chief officer's employment and continue to the first day of the next chief officer's employment.
By integrating strategic thinking with reskilling or upskilling the best internal or external talent, board members and senior executives have multiple talent pools to draw from at the time of a resignation or termination.
Progression planning also meshes with a shifting business climate where few can gauge the precise impact of external challenges like economic downturns, inflation, political instability, labor shortages and AI advancement. Nor can executives adequately measure the scope and impact of internal challenges like recruitment, retention, digital transformation, innovation, cost-cutting and reskilling.
By collaborating with senior management and external experts, board members can ensure the development of C-suite officer candidates with the skills, experiences and strengths to address an organization's strategic priorities.
But how? Boards can transform traditional succession planning into progression planning by providing oversight of multiple leadership development strategies.
Create realistic, evidence-based C-suite leadership profiles. Board members and C-suite executives can pinpoint future leaders by identifying required mindsets, beliefs, values and experiences, and how an organization defines success.
Who is the optimum or ideal leader? What characteristics or traits make that person a perfect fit for a leadership position in this organization? By reviewing the competencies, skills and experiences of current C-suite executives, senior executives and board members can ensure that up-and-coming candidates deliver on the business agenda.
What traits and mindsets do existing chief officers possess? Moreover, which traits and mindsets are lacking but essential to future business growth and performance? Consider the enterprise leader model, which identifies the five mindsets of purpose, courage across and beyond, awareness of self and impact, inclusion that multiplies, and integrative thinking along with the capabilities to visualize, realize, mobilize and catalyze.
Ensure alignment between organizational strategies and candidates' knowledge, skills, experiences and leadership styles. While board members might want to brainstorm what they hope for in a future CFO, CHRO or CMO, they should align personal wish lists with the organization's future strategic objectives.
Senior executives and board members might want a chief AI or strategy officer with specific traits and experiences. But they must get past personal preferences for senior executive talent and focus on the organization's business objectives — from productivity, revenue and customer satisfaction to employee retention, sustainability and leadership.
For example, if an organization wants to develop talent to fill the chief strategy officer (CSO) position, it should examine the growing role of CSOs along with CSO responsibilities, including:
- Evaluating an organization's current strategic initiatives and strengths.
- Analyzing an organization's readiness to undergo innovation and transformation.
- Applying models and frameworks that facilitate entry or expansion into new markets.
- Integrating insights from disruptive trends in technology.
- Discerning an organization's readiness to scale operations.
- Developing leadership qualities needed to orchestrate strategic initiatives and build a culture of collaboration.
More recently, CSOs have emerged as architects of merger and acquisition strategy development, which embraces valuation analysis, negotiations, due diligence, deal closure, financing, and integration and restructuring.
Overall, CSOs develop and implement strategies that accelerate financial growth through strategic partnerships, joint ventures and investments in new and emerging technologies — typically via start-ups.
CSOs analyze start-ups' market potential, team strength, financial stability and level of risk given their limited track records and unproven business models.
They also realize that the start-up landscape is ever-changing. While they continue to invest in consumer Internet start-ups, AI and robotics, investment in the metaverse has already cooled down.
Provide oversight of internal candidate assessment. Board members and senior executives can help identify internal candidates with the potential to fit the organization's leadership profile. Doing so means looking beyond a candidate's job performance or relying on gut instinct. It means using objective assessment measures to pinpoint high-performing up-and-comers who may fall short on variables like credentials, executive presence or management endorsements. The goal is to develop a healthy pipeline of future leaders who can transition into professional development, credibility-building projects or long-term C-suite positions.
Internal candidates should also be reviewed in terms of immediate readiness vs. future potential. Some internal candidates can step into a position within a week while others could grow into a position within several years if supported by opportunities to develop the right blend of knowledge, skill and experience.
One issue is how can serious internal candidates build required skills and experiences through a development program tailored to the strengths needed to perform in a leadership role? An organization can assess a candidate's career development and future potential by reaching beyond past experiences to variables like mindset, drivers and motivators. The best candidates generate an impact by displaying agility, flexibility and resilience in the face of business opportunities and challenges.
Ensure the professional and personal development of internal candidates. Incorporating professional development in an organization is an important investment and retention strategy that enhances the probability of long-term positive change in behavior and performance.
Each internal candidate should have a personalized learning plan that outlines the required development, goals and objectives, desired outcomes and resources needed to achieve them.
Once an organization has assessed internal candidates, it can maximize their potential by moving them into meaningful projects and roles. Doing so fills gaps while giving board members the opportunity to see internal candidates in action.
As important as filling in experience gaps is coming to grips with the mindsets and behaviors that could generate conflict and compromise business performance and growth.
Among the attitudes and behaviors that derail executive careers are rigidity, arrogance, micromanagement, and a lack of trustworthiness, resilience and responsibility.
Offer oversight of how potential candidates stack up in the marketplace. Labor markets experience massive shifts. Senior executives and board members should understand the external landscape, including how an organization's leadership pipeline compares to the pipeline of competitors.
It is important for boards to stay informed about the talent that exists in the external market. Talent benchmarking — as often as every six months — helps identify the gaps and experiences necessary for developing and retaining internal talent. By examining high-performers, superstars and other leaders in the industry, organizations can ensure that they are familiar with the external talent market and that they have the potential to bring in new leadership if required. This can help organizations stay competitive and ensure continued growth. Senior executives and board members can also cultivate relationships with high-potential C-suite successors and even acquire talent for emerging leadership roles. Doing so can build a C-suite progression pipeline both inside and outside the organization.
Provide oversight on performance activation. Few internal candidates are prepared for the challenge, stress and scrutiny of serving as a first-time C-suite executive. Current chief officers should implement a program of ongoing support to ease the transition of new executives into the C-suite.
Leadership development should zero in on a candidate's traits and motivations, including how their attitudes, beliefs and values drive behavior. Development should also focus on how the organization defines success and how colleagues and competitors perceive and interact with the candidate.
Be sure to offer internal candidates roles and responsibilities that build credibility and create forward career momentum. By giving internal candidates the support they need to fill a role, an organization cultivates talent already engaged with the organization and more committed to a longer tenure.
Once an organization identifies vital executive roles and positions, it can analyze or introduce career pathways.
The issues include:
- How can an organization ensure that every candidate has access to leaders, skills and experiences?
- How can it steer candidates into P&L and high-growth projects while giving them the opportunity to stretch through enhanced exposure and experience?
Oversee the development of a progression-based culture. By implementing these steps, board members and senior executives can make C-suite progression part of an organization's DNA. The result is added stability and momentum to turbocharge performance, growth and innovation.
An organization must make a long-term commitment to progression planning. Looking at several generations of potential leaders ensures a disciplined response to C-suite changes that typically surface every three to four years.
C-suite progression success relies on how well an organization can embed the process into its culture. Progression planning is no add-on to an organization's business agenda; instead, progression planning is the business agenda.
By anticipating and prioritizing C-suite transitions years in advance, an organization can safeguard long-term stability and financial performance while avoiding the urgency and panic that often accompany terminations and resignations.
Provide oversight of internal candidate feedback mechanisms. Make sure internal candidates know where they stand by offering ongoing feedback and encouragement. Let them know how and where they add value and contribute to organizational purpose. Discuss their progress while sharing pathways to promotions and growth opportunities via challenge assignments, skill building and leadership apprenticeships.
The war for talent is real. Fostering a culture of career and leadership development instills loyalty and commitment, retaining top internal talent for the future. Progressive boards understand their role in disseminating this senior-level commitment throughout the organization as a crucial business imperative.