Internal Vs. External Leadership Succession?

Leadership development and leadership succession are of the most important concerns of effective leaders. One of the key decision which needs to made is what is an appropriate approach to leadership succession? Should leaders consider primarily internal or external candidates? The article "Internal Versus External Succession May Be Best Long-Term Talent Bet" provides some insight, it discusses research conducted by the global HR consulting firm, Hay Group which found that…

"…it’s more important to promote from within, particularly for senior-level executive roles. According to the numbers, external hires for a senior position, such as CEO, simply don’t last as long, and even when they stay, external hires often run into trouble more frequently than internal ones….. ‘Outside CEOs tend to get the boot quicker,’ said Ron Garonzik, vice president of Hay Group. ‘They’re at a disadvantage, because it’s harder for them to read the people, culture and nuances of working within the organization. Three-quarters of Fortune’s most admired companies hire from internal pools as a matter of preference or policy.’"

I feel that the the selection of a successor requires the careful consideration of an organisation’s competitive challenges, strategy and maturity. Does the organisation need to build on it’s existing strategy? Does the organisation need to re-invent itself? Some additional key questions discussed in the article that need to be answered before deciding our approach to leadership succession include:

• What’s the company’s strategic story going forward?
• What are the operating requirements over a three- to five-year time horizon?
• How is the organization changing?
• How will the top executive roles need to change to fit new business demands?
• Does the organization need the successor to be a visionary?
• Should the person have deep operational credibility and experience? 

One of the interesting points highlighted in the article, is the importance of planning for leadership succession whilst considering what will the organisations top business critical positions are over the next 3-5 years and what style of leadership would that operating model require….

"Internal candidates have an edge, because an organization has the opportunity to proactively assess what development and experience candidates are missing, provide these and subsequently mitigate risks well in advance of a proposed transition or succession. This assessment means asking questions to find out exactly what’s needed to groom people for those top 30 or so business critical positions…… ‘You’d be surprised how many organizations, …[are]…. not automatically clear on the positions that will drive their operating model,’ Garonzik said…… Once you’re clear on the positions, then you can ask, ‘What do we need from a leadership standpoint? How can we better prepare people for those different positions?’"

How effectively are you developing your organisation’s or team’s future leaders? How effective is your succession planning?

Technorati Tags: Leadership Development, Leadership, Succession, Talent, Planning, Strategy, Business, Management

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Tagged as: Leadership Development, Leadership Succession, Strategy