As an executive search firm, our focus is on helping companies find the right talent – whether there is an immediate need or an anticipated need in the near future. Transition periods like these can be volatile, but they don’t have to be. With a structured external and internal succession plan in place, identifying a leader for your organization can be a seamless process.

While the reason for a leader’s exit from a position may be known (e.g. retirement or failure to succeed in the role), oftentimes that is not the case (e.g. they are recruited to another company or leave for unexpected reasons). These changes can provide the opportunity for your company to hire someone who will be a change agent or even pivot the organization in a new direction to better keep up with, or outperform, the competition.

That said, the best place to start in succession planning is by considering the short- and long-term goals of the company. If your goal is little-to-no disruption, then you may benefit from promoting from within, which seems easier than looking externally. It is typically more straightforward to evaluate current employees (because they are a known entity). The downside of promoting from within is that you are not necessarily getting the A+ talent you may need to grow, and you may be “settling” without knowing what’s available in the market. If your goal is to advance the organization, internal candidates may not have the experience or knowledge required to spearhead that shift, in which case an external candidate may prove to be the best option. Alternatively, external candidates can serve to validate the selection of internal candidates.

Regardless of the direction your company intends to follow, a competent and strong leader is required. In order to assure continuity of leadership and growth, the best practice is to implement a succession planning process to vet both internal and external candidates – ideally long before you would need to make a decision. A model such as this will enable you to build a deep bench of both internal and external talent from which to draw when necessary.

External Succession Planning

External succession planning doesn’t need to be disruptive to companies or executives if handled the right way. While an internal candidate is often a safe hire, the risk associated with an external hire is often worthwhile, as new thinking can push the company to grow. In many cases, an external candidate serves as a gamechanger, facilitating a positive disruption that complements existing leadership.

Companies will benefit the most by conducting an internal and external process simultaneously. If done appropriately, you can be in a great position to compete for talent before any real need surfaces, and when it does, a robust bench is ready. This may mean that you consider unexpected choices, like executives from adjacent industries or those with a unique background who wouldn’t normally be considered. Because this process takes place over months – or even up to a year – you can take your time getting to know the candidates and better evaluate their fit in your organization. This also allows you to prioritize diversity (ethnic, industry, gender, function), ultimately expanding the depth of your organization.

This process can be entirely confidential, so that internal employees are not aware that external candidates are under consideration, or the process can be fully transparent. Most internal candidates, in fact, are aware that external candidates are being considered. Internal HR departments and talent groups typically do not have sufficient time to handle a truly comprehensive process due to their day-to-day commitments, and a confidential search can prove to be difficult.

Forward-thinking leadership recognizes the value of external succession planning. Fostering a talent pipeline drives greater opportunity for a company – that is the bottom line. If you’re interested in having HFA facilitate your pipeline process, contact me for more information.

Eric Ferst, Senior Principal