Board succession is back on the agenda
Keeping staff safe and just getting the job done has been front and centre for boards and executive teams over the last 18 months. But now that firms are bringing leadership teams and boards physically together again for real strategic planning, we are starting to see investment in people back on the agenda. And the question of senior succession, largely left on the back burner during the pandemic, has returned to the priority list.
As if the pandemic and disrupted supply chains were not enough, we have also eased into a period in which capital is abundant and talent is scarce. Developing internal talent as a means of retention and securing the future leadership of the company seems never to have been more important.
This is of course true for both public and privately-owned companies but we are seeing a particular emphasis on succession for private equity owned businesses who might be envisaging an exit in the next 18 months or so. They know that a strong and credible succession plan is an important underpin to the valuation of a business, not to mention being potentially reputation enhancing or damaging for the exiting CEO / chair / sponsor.
Stepping up is tough
For most individuals, moving up to board level however, is a tough step, as those who have gone through the process will attest.
Board level executive roles (which might involve 20% to 30% of time focused on board / stakeholder issues) necessitate “letting go” of historic areas of mastery and delegating effectively to more senior and capable individuals.
These areas of mastery often become a source of psychological security as executives move through senior management but, on promotion to the board, can be largely replaced by fear and insecurity: feeling threatened by stronger individuals under them, coupled with the fear of using new skills and moving into unknown territory.
In addition, facing up to board level scrutiny and the realisation that “no one else is going to make this decision for me anymore” is fertile ground for self-doubt to further undermine confidence. As I observed to a client recently, it’s unusual for an executive not to experience imposter syndrome – powerful negative thoughts such as “I’m a fraud”, “They are going to find me out” – in some cases several years into a role!
It’s tough at the top
The emotional component of stepping up to senior leadership is hard for an individual to manage alone. A while ago I said to a newly promoted CEO client that the emotional challenges of the role would surprise him. He brushed it off but six months later, after a bruising series of board meetings, the CEO started a session by telling me how he never expected the role to be so emotionally challenging.
We believe that the most effective way of guiding leaders though this process is through one to one coaching; exploring with the client their ways of working, looking at skills deficits, developing strategies for stakeholder management and more effective management of their “inner game”.
We have been working hard with clients in preparing board roles for next phase of ownership over the last nine months and would welcome a conversation if these themes ring true for you.