Last week we heard the news that RBS chief executive, Stephen Hester, is stepping down from his position in the bank at the end of the year. He’s said to be ‘co-operating amicably’ with the board’s decision to identify a successor, but it’s clear that the situation is by no means ideal. For instance, we have to question whether Hester will put full effort into a job that he has already resigned from, and it stresses the importance of having a robust succession plan.
No matter what sector an organisation is in, the loss of a leader can have a detrimental effect on it. As such, it’s imperative to have a structure in place before anyone actually leaves, so that an individual in a critical role can be replaced quickly with minimal disruption. And in a competitive market, maintaining a sustainable talent pipeline is more important than ever. So how can you get it right?
It’s fundamental that new leaders can fit in with the DNA of their predecessors. And often, it helps if an individual is already embedded in the culture and values of your company, so hiring internally can be extremely beneficial. In order for this to be successful, you should be continuously indentifying the high potentials in the business, looking at the roles they could fill higher up in the organisation. It’s also important to develop those that perhaps aren’t ready for promotion yet, but could be in the long term. Regular career training should be carried out for all employees, not only high potentials, and everyone should be made aware of what their career progression could look like within the company, regardless of whether they’re part of a succession plan or not.
Linked to this communication aspect, it’s also important that HR professionals receive buy in from all stakeholders so that everyone is on board from the start. HR teams shouldn’t have to take sole responsibility for succession planning. In fact, they can often work better if business leaders have real involvement because they are in the best position to outline necessary skills.
Replacing a leader is never easy, and it can take time to adjust to new management as RBS will undoubtedly find when Hester is replaced. However, implementing a succession plan can make the transition much smoother. It may be complex in the first instance, but it’s worth taking the time to get it right and think about the long term.
