A smart succession plan could be the key to continued organizational success when a key leader leaves–but, according to a new survey, many companies are ill-prepared for that circumstance.
The Korn Ferry survey of about 900 C-suite executives–in the roles of CEO, CFO, CTO, CMO and CHRO–found that 42% of respondents said their organization does not have a comprehensive succession plan should a C-suite leader step down. What’s more, 77% said there is not an internal candidate who would be primed and ready to take on their role today.
The data were broken down by position, which revealed some interesting insights. For instance, CHROs were most likely to have a succession plan for their role (52%), while CFOs were least likely (38%). CMOs were most likely to report there not being a ready-now candidate for their job (84%), as was the case with 71% of CTOs; CHROs were in the middle of the pack, with about 76% who said there is no ready-now candidate for their position.
When it comes to remedying that stat, 46% of CHROs surveyed said strategic thinking was the skill most in need of development among their direct reports.
“Grooming CHRO successors is a difficult challenge,” says Joseph McCabe, vice chair of Korn Ferry’s Global Human Resources Center of Expertise, “because the greatest skill gaps we see in potential successors–board exposure, managing the compensation-committee relationship and executive-compensation knowledge–are also the most difficult areas for a CHRO to delegate.”
One stat that could highlight why CHRO succession is not on the radar of more organizations is that nearly one-quarter of CHRO respondents said they don’t believe their company perceives their role as being important to business strategy.
That’s a misconception, McCabe says, which could inhibit future organizational success.
“How work within organizations is being done is rapidly changing. And as agile work teams continue to develop, it will have a huge impact on accessing talent with the right skills for an organization’s needs,” he says. “It’s critical that CHROs are involved in looking at the future of their organization’s workforce during strategy development.”