Succession Planning


 Leslie H. Krieger, Ph.D.,SPHR

President/Consulting Psychologist Assessment Technologies Group

Consulting Organizational Psychologist Fautores Family Offices


Succession planning is a strategic process that requires a focus on the future market(s) in which the organization will be operating.  In today’s rapidly changing environment, most organizations will find a five year future time frame to be most realistic.

What regional economic forecast data are available from government resources, trade associations, and Chambers of Commerce that attempt to predict conditions that will exist in your market(s) five years from now?  Will the market area(s) grow or shrink in population?  Will new businesses be attracted to or move away from this area(s)?  What is being done to support the infrastructure needed for healthy market growth?  Surprisingly, well-informed predictions are available to answer these questions, and these predictions should be the starting point of any organization’s succession planning activities.


Once the nature of the future market has been established, the organization needs to consider the leadership structure that is likely to be most successful in that future market.  And that optimal future structure may not be the one that the organization has in place today.  So it’s critical that succession planning activities focus on that future organization structure, not just on so-called “replacement planning”.  Many organizations are considering more flexible structures that can evolve as the market demands change. “Matrix Management” and “Shared Leadership” are two of the most popular of these flexible structures.

In many situations the current leadership team has difficulty visioning future leadership structures or may want a second opinion to verify or challenge their assumptions about future leadership needs.  When a second opinion is sought, it’s tempting to call a consultant who may have a background in Industrial/Organizational Psychology or an MBA in Organizational Design or Development.  But buyer beware!  Has that consultant ever actually succeeded as an organizational leader, either by performing really well in a key leadership role in someone else’s organization or by evolving leadership skills in an organization they helped to create?  The best leadership consultants are those whose own leadership has driven organizational success.  


In recent years there’s been a lot of talk about the “war for talent” or the widening “skills gap”, and indeed demographic data suggest that in many metropolitan areas these concerns are very real.  But sometimes your organization’s best future leadership talent is hiding in plain sight, already on board and looking for opportunities to stay and grow.  Some larger organizations have a highly structured process for identifying and nurturing these “high potentials”, but in many cases this process is flawed by political power plays and personal posturing.  Often the real quietly confident talent gets lost amid all the noise.  

What are the best ways to identify leadership talent?  There are two great ways to identify talent, one of which is widely used in organizations that value their people, but the other is often completely overlooked.  Organizations that value their people typically have established benchmarks that signal when an individual has the potential to grow beyond their current role.  These benchmarks may include success in stretch assignments or valuable contributions to a problem solving task force. The benchmarks may even include self-initiated development and/or creativity.  When an individual obtains a benchmark, they are seen as having the potential to grow further in the organization.

But what about that overlooked method of identifying talent?  Surprisingly it’s self-nomination!  Sometimes a really strong contributor is working off site or for a leader who is already retired on the job.  The very best succession planning strategies include a mechanism for self-nomination by anyone who has met or exceeded specified tenure and performance expectations.  Often a person who is entirely off the radar of organizational leadership wants to demonstrate that they have the potential to move into a role with increased responsibility, and the self-nomination process provides that opportunity.    

Just in case you might think that self-nomination is some radical new succession planning concept, it’s instructive to note that between 1969 and 1974 one of my clients used this approach exclusively to fuel its rapid, successful growth into one of the premier organizations in the product distribution industry.     


So far our discussion of the succession planning process has focused entirely on the identification of talent already in the organization.  And certainly the identification and development of internal talent should be the primary focus of any organization’s succession planning.  But focusing only on internal talent creates the risk for inbreeding of ideas and the mindset of “this is how things have always been done here”, leading to  resistance to changes which might indeed better position the organization for continued growth and success.

External talent can bring fresh approaches into an organization, expanding its problem solving capabilities and sparking creativity as fresh ideas rub up against established ways of doing things.  But seeking external talent is especially critical if an organization is planning to expand into a space where they have never had a presence.  In the early 1990’s one of our rapidly growing clients suddenly took a financial hit as their competitors began sourcing products in Asia at much lower cost.  Our client quickly recognized the need to develop their own Asian sourcing and began to send candidates for this sourcing role to ATG for assessment.  Every one of these candidates fit the client company’s employee image: very well dressed, really handsome white fraternity guy.  But it soon became clear that none of these candidates had the savvy to navigate the world of Asian product sourcing.  Finally a very different candidate showed up: somewhat sloppy in appearance and not even a college graduate.  But this unlikely candidate not only was fluent in several Asian languages, but already had critical business connections in these countries.  He was a natural for the role but totally unlike anyone this client had ever hired.  I literally dared the client’s president to hire this individual.  The dare was taken, and after only 24 months this individual’s efforts contributed 40% of the company’s profits!     


One celebrity psychologist is famous for saying, “What got you here won’t get you there!”  Past success in the organization suggests the potential for future success in a more demanding role, but certainly does not guarantee that success.  Assessment is the most effective way to explore an individual’s potential for success in more demanding organizational roles.  Ideally the organization has been systematically using assessment both as part of the initial selection process and also as the guide for continuing personal and professional development.  In this ideal situation there already would be baseline assessment information on individuals who are being invited into assessment as part of the succession planning process.

Succession planning assessments should explore an individual’s potential more broadly than did the initial selection assessment which sought to determine the individual’s readiness to function effectively only in a specific job role that the organization was trying to fill.  So what type of assessments should be included in this broader succession planning assessment process?  In spite of very vocal objections from some of ATG’s most successful client organizations, we continue to emphasize the importance of measuring critical thinking capabilities such as verbal critical thinking and numerical critical thinking which are requirements of virtually every leadership role, and also the importance of the more specialized critical thinking capabilities measured in such assessments as Spatial Reasoning, Diagrammatic Reasoning and Mechanical Reasoning. 

The sad truth is that most of us have met individuals with awesome critical thinking capabilities who have not been able to function successfully in even a moderately demanding organizational role.  So obviously critical thinking power by itself is not sufficient for continued success and growth within an organization.  All of our clients recognize the importance of work-related personal style and emotional intelligence as the two foundations for successful performance of almost every role and also as the essential attributes needed for skillfully navigating the climb up the corporate ladder.   

A brief reminder here:  The Federal EEOC and ADA Guidelines apply not only to assessments used for selection, but also to assessments used as part of any employment decision making process, such as nomination to high potential status, promotion and even termination.  ATG prides itself on providing its clients only the assessments most highly validated to support any employment decision making process.  Each of the assessments offered by ATG is backed by extensive research including validation for specific workplace applications.  Don’t believe me?  Ask for a download of the technical documentation for any of our assessments.  The Technical Manual for the Saville WAVE assessment, for example, is now more than 760 pages in length and makes for a great read if you’re having difficulty falling asleep.  Yawn!


If you’ve done any exploration of the assessment space, you know that there are dozens of validated assessments of work-related personal style and also several validated assessments of emotional intelligence.  In the world of psychometrics, validity is expressed as a coefficient of correlation (r) with r=.00 indicating an entirely random relationship between the assessment score(s) and a work-related criterion behavior and r=1.00 indicating the usually unattainable perfect prediction between the assessment score(s) and the work-related criterion behavior.

As a benchmark, the average validity for the Five Factor assessments of workplace behaviors so popular in the US has remained at r=.24 since the mid-1980’s when these assessments such as the Hogan and the NEO were first created.  ATG has never been satisfied with predictive validity of just .24 since that correlation indicates that the assessment score(s) account for less than 6% of the variance in workplace performance.

Contrast the .24 validity coefficient of the Five Factor assessments with the .55 validity coefficient for the Saville WAVE assessment which accounts for 30% of the variance in prediction, five times more powerful than the typical Five Factor assessment.  WAVE’s impressive predictive power is not an accident; WAVE was constructed on the basis of analyzing the results of over 80 million administrations of Peter Saville’s earlier OPQ assessment of work-related personal style.  Bravo for big psychometric data sets.

And Bravo also for the dozen and a half specialized report formats that now can be created from a single candidate administration of WAVE.  For succession planning applications, the WAVE Expert Report and the seventeen page WAVE Leadership Report are likely to be most relevant.  There also are several specialized WAVE Development Reports that are ideal to support the coaching phase of the succession planning process.  If you are not familiar with these new WAVE reporting formats, please ask us to send you sample reports.


The rationale for including assessments as part of the succession planning process is based in part on the recognition that even a strong candidate for succession is likely to have some areas for development.  If the organization has done a great job of triaging its succession planning candidates, very few of them should generate troubling or disappointing assessment results.  And in the rare situations where these disappointing outcomes do occur, the results themselves almost always point to compromised resilience, the inability to respond constructively to potentially stressful situations.  Sharing compromised resilience results with a candidate is a very real challenge, and most of our client organizations will reach out to our ATG doctoral level psychologists to provide feedback in such a sensitive situation.   

Fortunately compromised resilience is not found very often, and many of our client organizations have human resources and/or organizational development professionals who have been trained to provide meaningful developmental feedback from the WAVE and EQi-2 assessments.  Smaller clients most frequently engage our ATG doctoral level psychologists to provide this developmental feedback over the phone or via videoconferencing.  Whether provided internally or externally, the goals of this developmental feedback are first the co-creation with the candidate of the personal meaning of these assessment results, and second the agreement with the candidate on a plan of personal development based on a combination of the assessment outcomes and their personal career goals.


The rapidly evolving field of positive psychology focuses not on the troublesome attributes that may limit an individual’s career potential, but instead draws our attention to the dynamic attributes that help the individual thrive as they encounter the more challenging demands of higher level leadership roles.  ATG is very fortunate to have Dr. Elliott Rosenbaum as a member of its team of consulting psychologists. Dr. Rosenbaum has written extensively on the critical role of positive psychology in leadership success, and has trained an elite group of coaches who can deliver his highly impactful positive psychology leadership development program. 

Individuals identified as having high potential through the succession planning process are ideal candidates to benefit from coaching in the positive psychology of leadership.  Positive psychology coaching not only speeds up an individual’s readiness to assume additional leadership, it also, and perhaps more importantly, greatly expands the individual’s repertoire of responses to any opportunities or issues that may emerge as they engage as thriving, high potential leaders.


We began by emphasizing that succession planning is a strategic process, not a tactical event.  And this strategic planning process needs to be not just supported, but more importantly, actively championed by the organization’s top leadership team.  The frequency of occurrence of the strategic succession planning process depends on several variables:  Succession planning frequency typically increases with increasing organizational size, increasing number of incumbent leaders who are eligible for retirement, and increasing recruitment pressure on incumbent leaders from competitive organizations willing to make attractive offers for top talent.

Perhaps a guideline for the frequency of launching a succession planning cycle would be every five years for organizations with 500 or fewer employees, every three years for organizations with 1000 or fewer employees, and annually for organizations with more than 1000 employees.


Even for a relatively small organization, the actual costs of succession planning are surprisingly modest.  Compare the succession planning investment with the constant need to recruit top leadership from outside the organization.  Factor in the value of institutional knowledge maintained by an internally promoted leader vs. the time and cost of recruiting and developing an externally hired leader to acquire that institutional knowledge, and the ROI calculation becomes all too obvious:  succession planning pays for itself directly by reducing costs and indirectly by boosting the organization’s potential to continually increase its profits.  And, yes, there is dramatic research from Corporate Executive Board to support that ROI claim.  Publicly traded companies that invested in supporting the growth and development of their employees outperformed their market segment peers in both ROI, Return on Investment, and ROA, Return on Assets.

The bottom, bottom line?  If your organization does not yet have a structured succession planning process, challenge your organizational leadership to begin investing in a success planning process as soon as possible.  If your organization already has a great succession planning process in place, be sure to include the availability of that process in your organization’s employment branding.  If there really is a war for talent, the organizations with the best succession planning processes are going to be the winners.