People Factor After you decide how wide-ranging your succession strategy will be, it’s time to select the likely candidates for those spots. A thorough succession plan will include candidates who can take over a job if an executive leaves immediately (because of an accident or corporate fraud, for example) or for a longer period of time. “Obviously those are different answers for many of the positions,” says Wheeler. “You may have some people you think have great potential, but you wouldn’t make them that person today in a promotion.”
At Gables, possible successors aren’t selected by the CEO or the human resources department, as one might expect. Instead, Wheeler asks all company officers, about 30 people, to suggest likely candidates and provide a contingency plan for their jobs. In these discussions and documents, Gables staffers tell company execs: “Here are the people that work for me that would be candidates for my position, here’s [areas in which] they are strong, and if I die today, this is what I would recommend happen,” says Wheeler. The employees also note how to prepare their successors, which ranges from more exposure to real estate deals to leadership training courses.
Grooming employees qualifies as a significant part of succession planning, as selected candidates generally need to grow and develop their skills and experience before they are ready to tackle these higher positions. “The critical success factor [for such an effort] is to first sit down with the individual and acknowledge their skills,” says Toomey. “What skills do they have today? What skills are they going to need to move forward?”
At Equity, the company is answering such questions through an organizational development team that helps identify and train ideal matches for various positions. “We have a very serious process where we identify both who is a high performer and who is a high potential [performer],” Duncan says. While he realizes that high performers are critical to the company’s success, “It’s really those high potentials that we want to focus on,” Duncan says.
Employees have personalized development plans to help grow their skills and talents. Equity offers its employees extensive training and leadership programs, taught by both in-house and third-party professionals.
However, it’s important not to make succession planning too stringent and formulaic. At Gables, Wheeler tries to keep the process informal with plenty of mentoring and friendly coaching. “The pendulum [at some companies] has swung so far that they are trying to put everybody into a computer program and say OK, you’re an A track guy, and you’re a B track guy, and you’re a C track guy, and here’s what we need to do,” says Wheeler. “We are not going there.”
Missing Persons What do you do if you don’t have a logical candidate in line for a certain position? You start thinking about your options now, before you actually need to fill that spot.
To avoid a potential crisis, Wheeler constantly assesses the abilities of his team. “I want to make sure that all of my direct reports have the potential to become a CEO someday, and if I were to determine that one of them did not have the potential I may—and it’s happened—make a change on that basis only,” say Wheeler.
Others try to evaluate an employee’s future career options from the very start. When Mid-America Apartment Communities hires a new employee at the property management level, hiring managers often consider the person’s future capabilities and contributions to the company. “The long-term thinking is that those same people may be good candidates for long-range succession planning,” says Nancy Roberts, senior vice president of organizational development at the Memphis-based REIT.