By Darren H. Burton
How does a professional services organization prepare itself for a future of changing client needs and regulatory requirements, emerging technologies, new business models, and shifts in the workforce? How does it make sure that it can continue to deliver business results today, while enabling its workforce to adjust rapidly to the changes around it?
It starts with leadership. And at KPMG, we believe that leadership is not something that can be left to chance. Having leaders with the requisite knowledge, skills, and interpersonal qualities—at multiple levels within the organization—has placed increasing importance on our succession management efforts.
The concept of succession management is not new. However, we have learned some important lessons about making this critical process more relevant in today’s evolving climate:
- Build a cadence to ensure active involvement by senior leaders – Succession discussions need to be part of an ongoing dialogue that regularly reviews the current mix of emerging and available leaders. Within KPMG, we devote quarterly meetings of the firm’s Management Committee to review our upcoming leadership talent needs by roles, and evaluate potential candidates. These ongoing discussions keep the succession plans relevant, taking into consideration changing business conditions and leadership requirements.
- Take a hard (and soft) look at strengths and weakness – Identifying effective leadership qualities truly requires a multi-dimensional approach. For example, performance measures can demonstrate areas of past achievement. Quantitative assessments can help to identify specific traits that exist within individuals and determine if there are aggregate needs to develop within the talent pool. At the same time, these quantitative approaches should be balanced with more qualitative insights such as upward feedback and peer reviews. Using all of these inputs not only provides a well-rounded perspective of potential candidates, but also mitigates the potential risks and biases associated with using a single approach.
- Use metrics to gather past insight and inform future decisions – Understanding factors such as the overall size and depth of leadership pipelines; the extent to which past succession plans were executed (i.e., did potential candidates actually move into available positions); the correlation between experience in previous roles and success in future positions; and the extent to which diverse candidates were considered in the process can help make better, more informed decisions. These metrics can be used to guide the process and provide insight for senior leaders on the overall health of the succession efforts.
- Make sure that development and succession go hand-in-hand – Perhaps the most important—and often overlooked—part of succession management is the identification of development opportunities for the next generation of leaders and the proper resources and governance to support them. We work with our high-potential leaders to complete customized development plans that indicate the types of development opportunities, such as rotations, external leadership experiences, coaching, that are required.
Even if we can’t predict the future, we can prepare for it by identifying individuals who have the right capabilities and experiences to operate in an increasingly uncertain environment. Succession management, done well, improves the odds for making the right decisions around preparing tomorrow’s leaders for the challenges of an increasingly disruptive future.
Darren H. Burton is Vice Chair of Human Resources for KPMG LLP.