In the future, Favre may be fortunate to have only his last name misconstrued.
After a career with the Green Bay Packers in which Favre established himself as indisputably one of the greatest quarterbacks in NFL history, his legacy is now tainted. And it's all due to one reason: his inability to let go. With one mediocre season behind him after "unretiring" last year, the sports world is now alive with speculation that Favre will unretire for a second time and - much to the horror of die-hard Packer fans - take the offensive helm for their primary rival, the Minnesota Vikings. The average fan asks a simple question: Why?
"Far too many leaders (as well as athletes, actors and other professionals) just cannot let go," observes best-selling author and i4cp's Chairman Emeritus Marshall Goldsmith in his latest book, Succession: Are You Ready? "They hang around until they are asked to leave - then they have nowhere to go."
"Successful transition," advises noted leadership expert Frances Hesselbein, "is the last act of a great leader."
So why do so many previously great leaders fail miserably at this last act? In a phrase: It is painful. "Is there any evidence in the history of the world that shows when human beings are given incredible amounts of money, perks, status and power they begin to act completely sane and rational?," asks Goldsmith. "Millions of leaders throughout history have had trouble letting go of (those things). If you cannot make peace with giving up some of this stuff, you will never be able to make a smooth handoff." Goldsmith has observed firsthand many times that, while the theory of stepping down from a role is easy, the practice of letting go is a lot harder.
While organizations worldwide may have the best intentions for succession plans, their execution often leaves a lot to be desired. In a study i4cp conducted last year, we found that over 85% of large companies (more than 10,000 employees) have a formal program in place. Yet, that doesn't mean that these programs are as effective as they should be. In fact, a survey done by the National Association of Corporate Directors (2007) found that only 16% of directors agree that their board effectively plans for CEO succession. And that is despite the fact that succession planning is a priority: It topped CEOs' list of their top five challenges for last year, according to the Society for Human Resource Management, ahead of other hot-topic areas such as recruiting, retention and healthcare costs.
Why is succession so important?
"A good succession plan is good for productivity," according to former General Electric CEO Jack Welch and former Harvard Business Review editor Suzy Welch (2008), who assert that succession planning avoids disruption and employee trauma when the CEO leaves, whether the departure is anticipated or not. They contend that succession planning should be company policy, dealt with openly and deliberately by corporate boards.
The Welchs' contention that productivity benefits from solid succession planning is partly supported by the "Most Admired Companies" (MACs) survey, annually conducted by the Hay Group on behalf of Fortune magazine. In 2007, it found that MACs consistently outperform their peers at planning CEO and executive succession. This same group also leads their peers in identifying key competencies for leaders and developing internal talent. The Hay Group found that the MACs' leaders devote as much as 30% of their time to coaching and managing their talent.
Developing talent from within seems to pay dividends. "There is no research that shows external CEOs to be superior to internal CEOs in producing long-term returns to the corporation," states Goldsmith, and "hiring a name brand CEO from outside the company who fails is usually a disaster." But before a leader identifies and anoints an internal candidate as his or her successor, it's important to think about acceptance. "Ask an important question," advises Goldsmith. "Will this candidate be given a fair chance, not only by me, but also by the stakeholders who are critical to her future success?"
Goldsmith notes that, after involving stakeholders in the succession process, a leader can encourage them to help the successor by asking them to:
- Be open-minded - and not stereotype the potential successor.
- Focus on the future - not the past.
- Be helpful and supportive - not cynical, sarcastic, or judgmental.
- Tell the truth - and avoid sugarcoating reality.
- Pick a behavior that the stakeholders themselves should improve - as opposed to just working on improving the successor.
But, no matter who the plans are aimed at, there's that persistent problem of proving or measuring program effectiveness. Most companies simply don't know how well their succession plans are working, according to i4cp research. Only about one-sixth (16%) of all survey respondents with succession plans claimed that their organization measures the effectiveness of its succession plan, and just a third of large companies did. That is a critical oversight, considering the importance attached to succession planning and the relationship (based on research from the Hay Group and others) between succession planning and performance.
Technology might help. Succession management software has improved and become easier to use, but its cost-effectiveness is mostly realized by larger companies, maintain Buck Consultants' business experts Bruce Barge, Elizabeth Marshall and Peter Albert. They claim that using succession management software is an effective way of containing and managing data and of "auto-populating relevant data from other management systems" such as performance and learning. Large firms may benefit the most because of the greater number of potential successors and the sheer quantity of data involved (Behan, 2008).
But the best plans and the best technology won't overcome the leader who resists the concept of succession. Some may go through the motions but never really plan to exit. "Try to avoid the ‘return from the grave' syndrome that is becoming far too common for CEOs," says Goldsmith. "Get over your own ego."
That's a secret to success that CEOs - and even famous quarterbacks - should take to the grave.
Documents used in the preparation of this TrendWatcher include the following:
- Behan, B. (2008, January 24). Shareholder proposals on CEO succession planning. BusinessWeek. Retrieved from businessweek.com
- Goldsmith, M. (2009). Succession: Are You Ready? Harvard Business School Press.
- Gurchiek, K. (2008, April). Succession planning not limited to the C-suite. HR Magazine, 16.
- Hay Group (2007). America's most admired companies favor internal CEO candidates. Retrieved from haygroup.com
- National Association of Corporate Directors. (2007, October 15). Strategic planning and CEO succession top list of director concerns for 3rd year in a row, 2007 public governance survey shows. Retrieved from nacdonline.org
- SHRM Foundation. (2007, October). Strategic research on human capital challenges. Human Capital Challenges Report, 10-21, 24.
- Welch, J., & Welch, S. (2008, March 9). Planning for succession low on corporate list.