Inside the art of succession planning
The new focus on company culture, sudden CEO departures and major external shocks have highlighted the importance – and complexity – of grooming future leaders.
The Australian Financial Review article, "Inside the art of succession planning," quoted Russell Reynolds Associates Consultant Peter L. O'Brien on why a focus on company culture, key leadership departures and major external shocks have highlighted the importance of succession planning. The article is excerpted below.
One of the many lessons of the past 12 month is the need for directors to be prepared for the unexpected. This is clearly the case when it comes to big external shocks such as extreme bushfires and pandemics - but it is also true of internal shocks, like a CEO's sudden departure.
Other companies that have recruited external CEOs in the recent months include Boral, which appointed Coles and The Star Entertainment Group director Zlatko Todorcevski to run the building supplies group, and record-keeping technology provider Link Group, where QBE executive Vivek Bhatia will take over as managing director in early 2021. The sudden departures, combined with the need for boards to focus far more on company culture after the Hayne royal commision, have prompted some boards to turn their attention to succession planning, says Peter O'Brien, managing director at executive search firm Russell Reynolds.
"It has put the fire under some boards about the need to be prepared for what might lie ahead. In the past two months I am having more conversations with clients about culture as it relates to CEO and board succession that I have ever had in Australia before," O'Brien says.
"Until now you'd be surprised at how little succession planning work was done. Hayne has accelerated it dramatically and well beyond financial services."
O'Brien concurs, "I don't think we do enough. There is generally a conservative mindset about the way leaders are developed. We have had two generations of leaders who have not had to face a downturn and volatility. It is so important in Australia to start putting future leaders into an uncertain environment so they can learn new skills and capabilities," he says.
To read the full article, click here.