Wed, May 29, 2024

Succession Planning: A key to lasting performance

A week ago today, there was a major shakeup in the world of college football as Nick Saban announced his retirement after 17 years as head coach of the Alabama Crimson Tide. Saban has been arguably the greatest coach in the history of college football. In his seventeen years at Alabama alone, he won over 200 games at a winning percentage of almost 88%, along with 9 Southeastern Conference (SEC) championships and 6 national championships. In a previous five-year stint at Louisiana State (LSU), he won two SEC championships and 1 national championship. While Saban is 72 years old, his retirement surprised many.

One person not caught completely off guard was University of Alabama Athletic Director (AD), Greg Byrne. As the person responsible for hiring Coach Saban’s replacement, Byrne was well prepared when the day came that he knew would eventually come. He had vowed to hire Saban’s replacement within 72 hours and he beat that promise by just about a full day, as it took him a mere 49 hours to hire University of Washington head coach, Kalen DeBoer, to replace Saban. However, only time will tell whether this is a good hire or not, but we do know that Byrne had a well-prepared succession plan to replace Saban. In this column, I would like to address some ways businesses (their owners, leadership, and/or boards) can best prepare for new senior leaders through succession planning.

Typically, the best path to effective succession planning is to build a “strong bench” of talent in your organization and invest in the development of that talent. Note that succession planning should be done not only for the top job (e.g., CEO) of the organization, but also for other high-ranking and critical positions. Having internal options typically works best for several reasons.  First, like keeping existing customers versus finding new ones, keeping existing talent is often easier than recruiting from outside the organization. It is also less costly as recruitment continues to become more difficult and expensive. Additionally, existing talent typically has a clear understanding of the culture and operations of the organization, which is critical, particularly in a well-functioning business.

Acquiring and retaining a strong bench is not enough. Preparing them for these senior/critical positions requires investment in professional development, mentoring, and highly competitive compensation while providing them with positions of increased responsibility. Finally, internal promotions into senior positions can signal/motivate other younger talent that opportunities are available by staying with the organization.

While succession planning focusing on internal talent development is often the best plan, it is not foolproof for several reasons. For instance, in the case of Alabama football, there was no logical successor on the current coaching staff. Such a successor would normally be the offensive or defensive coordinator, but those were staffed by those who were in their first year in their respective positions at Alabama, and each at non-optimal stages of their career to become a head coach. Offensive coordinator, Tommy Rees is very early in his career and not ready to be a head coach at a program like Alabama, and defensive coordinator, Kevin Steele was near the end of a forty-year career in coaching. Alabama was in this situation as their previous coordinators were wooed away to positions in other organizations. However, talent leaving is not the only reason to supplement your succession planning by identifying external talent. Sometimes, internal talent might be great at certain positions, but not seen as a fit for higher-level leadership. Additionally, you might want to re-energize your culture and innovation by bringing in talent from the outside.

So, how do you supplement your internal succession plan with external options? First, start to compile a list of talented individuals in your industry and/or potentially working for your competitors. You may do this by attending professional society or industry-focused meetings or conventions. Examine other successful firms in your industry and see who the “difference-makers” are, particularly younger talent who may be “blocked” from moving up in their current companies. In addition, you may want to have discussions with executive search firms who specialize in your industry and who likely know the strong and potentially available talent. In the case of Alabama football, I am sure Greg Byrne had a list of potential external candidates that helped him quickly land Kalen DeBoer.

However, as you conduct your external succession planning, you need not limit yourself to those with experience in your industry. While industry experience is extremely helpful, strong talent is transferable across industries. Therefore, as your path crosses with talented people through your civic and charitable organizations, you may want to consider them as potential future leaders of your organization. Clearly, a portfolio of internal talent and external possibilities will enhance your chances of maintaining excellent firm performance through proactive succession planning.

The Alabama football situation is an interesting one. A tip of the cap to Greg Byrne for being well-prepared through proactive succession planning which led to getting a successor in place very quickly. However, only time will tell if this is a good hire. In particular, it is very difficult following the record of success of Nick Saban. Kalen DeBoer could be a very good coach and people may still be unsatisfied if he cannot live up to the record of Coach Saban.

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