Succession planning and risk mitigation: Do you know who your future leaders are?
by: Steve Gravenkemper
Risk mitigation—it is the phrase which calls organizations to action. Increasingly, financial institutions are recognizing that facilitating seamless leadership transitions for key positions is a critical factor in sustaining the success of their organizations. Proactive succession planning efforts reduce the risk of hiring and promotion mistakes, loss of institutional knowledge, and the negative impact of turnover in key roles.
Successful transitions (at the CEO or any level of the organization) result from being intentional and proactive in identifying and developing talent to supply your organization with leaders to effectively navigate through a dynamic and turbulent time period in the banking industry. So how can financial institutions better prepare for succession, create an effective plan, and mitigate the risks?
Below are four steps to effectively mitigate some of the risks with succession planning.
1. Start early.
Too often succession planning is addressed only when change is imminent or in response to an unexpected crisis or staff departure. These situations create more risk because pressure intensifies to make an immediate decision—often considering only the best available candidates who may not be the best choices for key open positions.
Starting early not only allows for better planning, but allows for talent development to take place at a more realistic and achievable pace (for example, skill building, transitioning client relationships, developing leadership competencies, etc.). Perhaps the best candidates are already employed by your financial institution. Developing candidates from within your organization provides the dual benefit of promoting leaders familiar with your organization’s culture and values as well as providing professional growth opportunities for your top talent.
continue reading »
