Redefiners
Leadership Lounge: The Art of Succession: How to Identify Tomorrow's Leaders Today
Wed, 21 May 2025
Identifying and developing the next generation of leadership talent is critically important. No decision will have a bigger impact on the performance of an organization and its enduring legacy. Yet, many leaders struggle with effective succession planning. In this episode of Leadership Lounge, we talk to three of our trusted advisors—James Diggines, Rebecca Slan Jerusalim, and Stacey Shapiro—who share their perspectives on: The critical first steps CEOs should take to build effective succession processes How to spot leadership potential beyond the obvious candidates Common succession planning mistakes that can derail organizations Strategies for keeping unsuccessful candidates engaged and motivated How succession decisions can transform organizational culture "Too often succession is really a check the box exercise at a critical point in time, as opposed to having a long-term focus."Rebecca Slan Jerusalim, Leadership Advisor, Russell Reynolds Associates Four things you'll learn from this episode: Timing is everything in succession planning. Start succession planning as soon as you step into a new leadership role. The longer the duration, the easier it is to develop internal talent. Succession isn't replacement—it's development. Effective succession encompasses long-term talent development. Organizations must actively identify and invest in key talent year-over-year. Keep your talent pipelines broad and dynamic. Resist the urge to quickly converge on one or two candidates. Business conditions shift, and what you need in a leader today may differ dramatically from what you need tomorrow. Transparency builds loyalty. When succession decisions are made, providing clear feedback and development opportunities to unsuccessful candidates can retain crucial senior talent.A closer look at the research from this episode: Board Culture and Director Behavior Study | Russell Reynolds Associates Global CFO Turnover Index | Russell Reynolds Associates Russell Reynolds Associates Global CHRO Turnover Index | Russell Reynolds Associates Russell Reynolds Associates SHRM Succession Planning ROI Study | Society for Human Resources Management
Chapter 1: What is the importance of succession planning?
Welcome to the Leadership Lounge, a place to kick back and listen as our experts dissect some of the biggest questions leaders face today. I'm Emma Coombe, Leadership Advisor in our London office. As a leader, identifying and developing the next generation of leadership talent isn't just important, it's critical.
No decision will have a bigger impact on the performance of your business and its enduring legacy. Yet, many leaders struggle with effective succession planning, despite understanding its importance. In this episode, we're uncovering how forward-thinking leaders approach succession. Why do many succession efforts fail? How can you spot leadership potential beyond the usual suspects?
What actions can you take today to transform succession planning into a cornerstone of your leadership legacy? But first, remember to share any burning questions you want our experts to answer by emailing redefiners at russellreynolds.com. It would be great to hear from you. And if you enjoy listening to our episodes, leave us a five-star review on Apple or Spotify. Let's dive in.
To help us explore this critical topic, I'm joined today in the lounge by James Diggins, a leadership advisor in Russell Reynolds Associates Singapore office, who specializes in executive succession. James, welcome to the Leadership Lounge.
Thanks, Emma. Appreciate you having me in the lounge.
So James, C-suite tenures are decreasing across industries. Our research found that CFO tenure is at a six-year low, while CHRO tenure was just 4.4 years in 2024. With leadership transitions happening more frequently, succession planning is happening with a new sense of urgency. What first concrete steps should leaders take to build an effective leadership succession process?
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Chapter 2: What initial steps should leaders take for effective succession?
I think timing is crucial. The longer the duration you have, the easier it is to start. And I think my advice would be start as soon as you are appointed in role and start thinking about it. It gives you time to assess your team and understand what you've got and then help think about what development they may need. and what your external options are.
Leaving it too late is a really bad position to be in. We were called to do the CEO succession of a very well-known global financial services company three years ago, and the call came from the chairman to say, hey, we need to do CEO succession. And we said, when? And he said, I need to do it now. We said, what are your internal options? He said, one.
And so the board at that time meant they only had the choice of who the external candidates that were available at that time and one candidate internally. That's not a place you want to be in.
Yeah, James, that example highlights very clearly the dangers of delayed succession planning. A reasonable sized business that can afford to have really good talent would hope to have a minimum of two, if not three internal options that they'd been developing over a multi-year period. And it sounds like your client didn't have that.
And it really means that they lose tremendous leverage and flexibility there. And our research confirms this is a widespread problem. In our board culture and director behaviour study carried out last year with over 1,000 supervisory board level directors responding, only 29% said they had a three to five year CEO succession plan.
Whilst this data point is concerning, as a firm, the great thing we are seeing is this number trending upwards. More and more boards and nomination committees are investing time and energy into identifying and developing their talent at least three years ahead of a succession event. James, what else do you think leaders should prioritise when beginning the succession planning process?
The other two things are roles and then alignment. I think if it's a public company, understanding what roles people are playing, and that could be the chairman, the nom co-chair, the CHRO and the CEO. and understanding who's going to take the lead, what the cadence of the communication is going to be, and who's going to drive the process and for which role is really important.
And then the last is alignment. I think good organizations that do this well have got a really clear picture on what kind of challenges the organization is facing, what kind of opportunities they're facing, and therefore what some of the implications are for leadership.
Those are excellent points, James. And of course, having clearly defined roles in succession planning is key. But for me, it's the alignment piece that is most critical. Reaching a point of alignment on what we might call a future success profile, what you want the next leader to really bring, takes considerable time and effort.
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Chapter 3: What common mistakes do organizations make in succession planning?
One of the things that I think some companies trip up on is they don't prioritize the key roles. If you've got a CEO, they tend to have between eight, nine to 12 direct reports. You can't necessarily allocate same time on succession for all of those key reports. So pick the key roles. If it's the CFO seat, which is now increasingly seen as a CEO succession seat, pick that.
If it's a business role, some of the key business roles or sales roles, depending on the organization, you may want to prioritize them.
CEOs certainly need a targeted approach when they're thinking about their colleagues who have the most potential, James. And so I totally agree with you, aligning with the board, with the nominations committee on who those most likely internal successors are, and then really making sure they're tested by giving them new opportunities. Maybe it's group-wide projects if they're in a CFO role.
Maybe it's mentoring and developing other leaders in the organisation to test their followership. These kind of activities are so important to make sure that people can really get ahead and, as I said, be ready for the moment when the succession process takes place. I'd now like to turn back to you, Rebecca.
When identifying future leaders, we often gravitate towards candidates who are highly visible or remind us of ourselves. It's human nature, but this can, of course, create blind spots and missed opportunities. And Rebecca, it'd be great to hear from you on how CEOs and CHROs can develop more sophisticated talent spotting skills.
How can they uncover leadership potential in unexpected places across an organization?
What we really recommend is a leadership blueprint. This involves really well defining the criteria of success for that leadership role. The second piece here is really about the factors to spot talent. And when we think about the critical factors in succession, what we're really thinking about is, do they have potential to grow in role? Is there curiosity, adaptability, resilience?
Do they possess social intelligence? Do they use a systems thinking approach? Are they able to kind of self-reflect and have a broader purpose? And these are really qualities that are the hallmark of who has potential to continue to evolve their leadership.
You're absolutely right, Rebecca. And often looking for these qualities can lead to surprising discoveries. In our methodology, we come up with quantitative data individuals fill out a suite of questionnaires that builds their leadership profile, how others experience them as a leader. And then we also have a cognitive test that develops an output on how strategic an individual is.
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Chapter 4: How can leaders spot talent in unexpected places?
And one of the big questions that we're often asked by our clients is how they can retain the talent that has been unsuccessful, particularly as clearly this talent has been identified as high potential, and yet they've had to be let down on their ambition to be considered for a new role higher up in the organisation. What advice do you have for our clients in this situation?
I think first and foremost, transparency around the process is critical and making sure that individuals who are in the process feel well informed about any process that they're going to be part of. And ultimately, once a decision is made that the candidates also have a degree of transparency involved.
into how the decision was made and certainly receive feedback, both in the context of the successful candidate and transparent feedback for the individual who is not successful. And I think a great example of this, we recently did a CEO succession for an organization. There were two internal candidates One, of course, ultimately was successful and was named the CEO.
For the individual who was not successful, what the organization did was be very clear with that individual about their development opportunities and the gaps to fill, ultimately providing an expanded role that really served to help that individual fill those gaps in terms of their experience.
This had the benefit of, one, making that individual feel well informed about the process, supported in their development. And the organization retained this individual for about two years.
I think that's really good advice, Stacey. And frankly, it's quite likely that individuals who are not successful in such high stakes processes will leave. But the fact that your client kept somebody for two years is great. And hopefully one part of any candidate in a really high stakes succession process, one part of their responsibility is to think about backfilling for their own role.
So hopefully an organization has that well advanced. And if they do decide to leave, there's not such a big hole to fill. For our final question today, it can be difficult for leaders to balance developing their successes whilst continuing to lead the business and go on their own journey.
How can leaders effectively balance developing potential successes while engaging in their own personal and professional development?
I think this really requires a leader to redefine what success will look like for them. It's an important mindset shift for a leader to go from a career which has really been based on their own merits and their success has been based on what they individually have been able to accomplish. And this shift really becomes...
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