Executive succession planning is a frequent topic of discussion as I talk with CEOs and Executives at banks across the region. I thought I’d offer up my perspective on this topic.
First, a definition: Executive succession planning is part of a firm’s business continuity plan. It is about filling the organization’s talent pipeline and building bench strength. A talent pool is identified underneath each level, and successors are developed so that they are ready for promotion to the next level.
Of particular importance in the banking industry is that the future doesn’t always look like the past. Just take a look at the past two years. The competencies and skills required at each level have changed. Talent pools need to provide flexibility so that shifts in organizational strategy can be accommodated.
Finally, this is NOT just about the CEO position. Now, more than ever, it is critical to build bench strength in all areas of your bank – credit, commercial, retail, operations, etc. In addition to identifying whether (or not) you have the talent to succeed leadership in these areas, this will be invaluable in creating redundancy, fostering growth of employees, and demonstrating to the regulatory bodies that you are organizationally sound.
Here are the key steps to executive succession planning as I see them:
- Analyze the work and current executives/managers in all of your critical areas
- Conduct ongoing performance appraisals
- Develop a future view of work and skills required to succeed
- Evaluate internal and external candidates for development
- Consider developing several candidates for each position
- Establish development plans for identified employees
Effective succession planning pays off in innumerable ways, from recruiting and retaining top talent to ensuring stability and improving the bottom line.