Is Your Succession Planning Strategy Equitable?

Developing an equitable succession planning strategy is challenging but worthwhile. Organizations that commit to equity throughout their broader talent strategies are more likely to avoid bias, nepotism, and politicking in succession decisions. They’re also more likely to see positive organizational outcomes such as executive team diversity, employee engagement, and a more inclusive organizational climate.

In high-stakes talent decisions, personality data emphasizes merit. How? Personality assessment uses objective data to determine who is most likely to show leadership effectiveness. We consulted four Hogan Coaching Network (HCN) coaches for additional insight on building a succession bench equitably. The coaches are Ben Dattner, PhD, of Dattner Consulting, LLC; Rebecca Feder, MBA, of Princeton HR Insight LLC; Nattavut Kulnides, DBA, of ADGES; and James Sila of Re-Imagination Coach.

Let’s review why equity matters so much for succession planning and four characteristics of an equitable succession planning approach.

Importance of Equity in Succession Planning

All industries, markets, and roles are subject to change. The pace of technological transformation—especially generative AI—has required many organizations to question their preparedness and examine leader readiness.

“Just predicting success in a rapidly changing world is becoming even more elusive,” said Sila. He noted that talent leaders everywhere are asking, “Do we have the talent to deliver our business plan long-term?”

Because organizations can’t predict how they will need to adapt, an equitable succession planning strategy built on a diverse talent pool will serve organizations best.

Cost of Poor Succession Planning

The cost of poor succession planning is very high—close to a trillion dollars per year.¹ The VUCA market landscape can certainly contribute to mismanaged CEO and C-suite transitions. But organizations are also facing shorter CEO tenure, a median of fewer than five years in many cases.² Nearly as soon as an organization installs a CEO, they should begin searching for a successor. Other leadership roles may have even shorter tenure, necessitating a continual high-potential identification and development process.

According to Feder, filling an executive role in fewer than six months is simply hiring, not strategic planning. “When succession planning is done well, it’s an ongoing part of your annual cadence. Whatever form it takes, it starts early,” she advised.

In contrast to a hasty or reactive approach, an equitable succession strategy directly fuels job satisfaction, retention, engagement, performance, business effectiveness, and culture. Speaking about the business case for equity, Kulnides said, “Organizations underperform over time when compared to their peers that equip themselves with a better diversity across nationality, geography, gender, belief, and more.”

Equity as a systemic practice is good for brand reputation and makes good business sense, Sila pointed out. People want workplaces that value equity, where they know their performance will be fairly assessed and where they have equal access to opportunities. Simply put, succession planning best practices demand equity.

Four Characteristics of an Equitable Succession Planning Strategy

An equitable succession planning strategy is (1) transparent, (2) objective, (3) comprehensive, and (4) foresighted. Keep reading to get our coaches’ perspectives on these characteristics.

Transparency

Transparent succession planning begins with the role, not the people. Beginning with a well-defined role facilitates a more equitable selection process. “Too many times, companies start with, ‘Who are the people that we like best that we could put in the role?’” Feder said.

Clarity about the role can help remove bias. Kulnides explained that unconscious bias in recruitment and selection processes can result in a lack of diversity of personality and hinder organizational agility. Rather than placing a preferred individual into a role (someone who mirrors the profiles or thought patterns of other leaders, for instance), defining and prioritizing job competencies creates a transparent strategy.

Objectivity

Objective succession planning is founded on systemic fairness in selection, development, and high-potential identification. “I want leaders to make equitable talent practices systemic, or if they don’t, they may encounter some systemic bias,” said Sila. “Build the infrastructure to ensure that from planning to identification to development, the entire system has the right checks and measures.” Systematizing candidate selection overall reduces bias and positions organizations to gain the best possible talent for the role.

In particular, the candidate selection process should follow the same objective steps for each person. “Organizations should have a standard set of criteria to make the process as fair and objective as possible. They should make sure there’s a level playing field in the experiences people have,” Dattner said. Treating candidates differently can lead to intentional and unintentional discrimination, whereas standard practices help lower the likelihood of inequity.

Comprehensiveness

In a comprehensive succession strategy, the frequency and scope of succession planning is early and often. All four coaches concurred that starting early was crucial. Depending on the context, 18 to 24 months is a minimum timeline to execute a succession plan, although three to five years may also be appropriate. Since roles and business needs change frequently, succession planning should be a regular part of the annual or quarterly agenda of organizational strategy.

Comprehensiveness also means starting early in terms of career trajectory. “The earlier that you can introduce the concept of development the better, but don’t leave it to chance,” Kulnides said. He suggested keeping development in mind during recruitment: “Of everyone who walks into your organization, you should know whether you got the right person or not.”

Regarding a comprehensive scope, Kulnides recommended development at every organizational level. Front-line managers, middle managers, senior leaders, and executives all benefit from leadership development, high-potential programs, and coaching. This allows organizations to have the most robust talent pool, particularly in avoiding potential executive successors who are too similar when it is necessary to adapt. “When we look at executive bench strength, many times we end up with people with similar profiles or beliefs,” he explained. Too much similarity can hinder innovation and diversity of thought.

Foresightedness

A foresighted succession strategy requires predicting, to the degree possible, what will best serve the organization in the future. This might require making challenging people decisions contrary to the demands of corporate politics.

As an example, Feder told a story about a hypothetical organization that needed to fill a CEO role. The “obvious” successor to the outgoing CEO was the current COO, who had corporate knowledge and tactical skills related to running the business efficiently. But on the cusp of growing to an enterprise stage, the organization needed a CEO skilled at public relations and public speaking—skills the COO did not have or even want. “You’ve got to separate relationships from objective criteria of the role. Hogan comes into play for setting up what the role needs and assessing candidates against what you set up,” said Feder. In that circumstance, the hard call would be to find a different, more precisely qualified CEO than the COO.

Yet succession planning often goes beyond making an emotionally detached choice. Change management and buy-in are also important parts of a foresighted succession plan. “There’s an art to bringing stakeholders together, getting to a consensus, and balancing competing goals and priorities. Ultimately, it’s a very human process,” said Dattner.

How Hogan Helps

Personality assessment is a necessary tool in equitable succession planning. Personality assessment is fair. It shows no meaningful differences across protected groups. Personality also predicts performance. It allows organizations to know the extent to which someone is likely to have integrity, be competent, use good judgment, communicate vision, and many other leadership competencies.

Organizations that use personality assessment data to evaluate successor candidates against the job profile and against other candidates truly make the comparison fair for everyone. “To be able to compare candidates on the same dimensions is quite helpful,” said Dattner. Without bias, personality data reveals how well potential successors can demonstrate integrity, accountability, initiative, or whichever competencies are essential in the role.

Hogan personality data also facilitates executive team diversity, Dattner pointed out. “Ideally, Hogan can help identify nondemographic diversity, such as temperament, worldview, and cognitive and stylistic differences, which organizations should consider,” he said. Leaders influence organizational performance at the individual level by motivating and engaging employees, at the team level by fostering constructive team dynamics, and at the organizational level by shaping culture and driving strategy.³ A diverse executive team is very often a more effective and inclusive leadership team, with its influence touching every part of the organization.

At Hogan, we define leadership as the ability to build and maintain a high-performing team. A leader who leverages diversity is likely to treat people fairly, apply organizational policies consistently, and create an environment where employees can work at their full potential. “Leaders have to be able to create broad followership. You can’t just manage people who are like you. That, by definition, is a level of diversity,” said Feder.

Expert Contributors

Ben Dattner, PhD, is the founding principal at Dattner Consulting LLC. As an executive coach and organizational effectiveness consultant, Dattner has helped corporate and nonprofit organizations and executives to become more successful by enhancing leadership skills.

Rebecca Feder, MBA, is the principal at Princeton HR Insight LLC. A certified coach and human resources professional, Feder has coached hundreds of executives and teams across many industries, helping them understand how motivation and different management styles can positively impact performance.

Nattavut Kulnides, DBA, is the founder and CEO at ADGES. An experienced consultant and coach and a former C-suite executive, Kulnides partners with leading global assessment and leadership development providers to enhance human potential.

James Sila is the founder at Re-Imagination Coach. With more than 25 years of global talent management experience, Sila equips leaders, teams, and organizations to move confidently with robust, actionable human capital planning.

References

1. Fernández-Aráoz, C., Nagel, G., & Green, C. (2021, May-June). The High Cost of Poor Succession Planning. Harvard Business Review. https://hbr.org/2021/05/the-high-cost-of-poor-succession-planning
2. Jerotich, C., & Chen, J. (2023, August 4). CEO Tenure Rates. The Harvard Law School Forum on Corporate Governance. https://corpgov.law.harvard.edu/2023/08/04/ceo-tenure-rates-2/
3. Hogan, R., Curphy, G., Kaiser, R. B., & Chamorro-Premuzic, T. (2018). Leadership in Organizations. The SAGE Handbook of Industrial, Work & Organizational Psychology: Organizational Psychology, 269-288.