CEO EXECUTIVE SERIES!
28 MAY 2012
CLEARING THE ROADBLOCKS GETTING REAL ABOUT LEADER-
SHIP AND SUCCESSION PLANNING As Warren Buffett found out last month at his annual shareholder retreat, CEO Leadership succession isn’t just about thinking about the future. Stakeholders and investors now demand detailed plans to cope with future change. More is expected writes Darryl Judd, COO for Logistics Executive Group.
NEWS & EVENTS Upcoming Events
5th Global Logistics and SCM Summit on 30th May 2012 Attended by 250 plus professionals from 30 plus countries, the summit is an intense discussion on strategies for supply chain and logistics management and brings together many global thought and industry leaders. This is a must attend summit by all engaged in supply chain and logistics industry. Held in Dubai, UAE, May 30, 2012.
(click here to find out more) Global Logistics and Cargo Symposium 2012 - Malaysia The theme of the symposium “Economic Transformation, Leadership success and Integrity” and it highlights the challenges and opportunities for supply chain, stakeholders in the region as well as showcasing its homegrown best practices in supply chain and logistics management. Held in Kuala Lumper, Malaysia, June 27-28, 2012.
(click here to find out more)
As Executive Search Consultants we find there are certain challenges that our clients are faced with, no matter what industries they come from. One of the main themes we come across when undertaking a new search assignment is the subject of succession planning. Even more critical to company survival is the subject of CEO and Leadership Succession. It is not surprising that we touch upon this daily as the subjects of talent acquisition, retention and development naturally feed into each other. There is an increase in turbulence and uncertainty in today’s market, there seems a greater requirement than ever before for strong, stable leadership. There increasingly seems to be a unilateral awareness of this across all levels, not just from the Human Resources team but also across the Board to the lowest ranks of the company. There is a clear anxiety about the line drawn between the company’s future successes and its present leadership contingencies. © 2012 LRS Group Pty. Ltd. All rights reserved!
Logistics Executive Global News Logistics Executive’s LINKED IN Group hits 10,000 members Already with a candidate database of 80,000 plus Supply Chain and Logistics professionals globally, L o g i s t i c s E x e c u t i v e ’s i n d u s t r y networking group on LINKED IN recorded a key milestone in April by becoming one of the few specialist groups to exceed 10,000 members. The Logistics Executive LinkedIn Group is quickly becoming the hub for global supply chain and logistics experts and is free to join.
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CEO EXECUTIVE SERIES!
28 MAY 2012
This new and more often than emphasis on the not we find that the CEO replacement answer is yes but strategy was the outline of this manifest in 2009 plan is often hazy. with the US Security The reason for this and Exchange lack of contingency Commission can be attributed to removing the right the many mistakes, for companies to obstacles and avoid disclosing roadblocks that their CEO most companies succession process find themselves to shareholders. navigating when The result has been tr ying to an avalanche in the successfully media of close implement a Above: Warren Buffett. Source: Toronto Standard, May 2012- On everyone’s reporting on the succession plan. minds is the question of succession. l i ke s o f Wa r r e n Our clients have B u f f e t a n d h i s “In April, Berkshire CEO Warren Buffett told shareholders that he was dimost commonly agnosed with stage 1 prostate cancer. Non life-threatening nature of the dileadership exit a r t i c u l a te d t h e s e agnosis notwithstanding, the news led to wild speculations about the comstrategy from the road blocks/ pany’s fate a&er Buffett’s inevitable passing away. When a shareholder asked Berkshire Hathaway for updates on the succession plan, Buffett replied, “I think we’re going to obstacles with an which m a ke s come up with a result that you’' be happy with. Though I hope it’s not too emphasis in the headlines every time soon.” detail of executing there is a succession plans as: shareholders the status quo. Perhaps it is due • Lack of leadership support meeting. to the overwhelming nature of – As mentioned above this It is surprising therefore that adding this new task to what is is not as big an issue as it what we have found on our daily a l r e a d y a h i g h l y t a s ke d used to be as top managers tackling of this issue at Logistics management function. Whatever realize the importance of Executive that there still seems the reason, it is still the case that business continuity. The to be a high level of resistance to when we ask the question we are challenge here is t h e i m p l e m e n t a t i o n o f a met with a lack of information. maintaining an ongoing succession plan or a leadership Our standard practice when we interest and support by the exit plan. Perhaps this is due to tackle a new assignment is to ask management team. This is human nature and the lack of about the succession planning achieved through perceived interest in changing process involved in a new role communicating and reporting to keep them engaged and owning the process. • Agreement on the criteria for the talent assessment – This is a critical step as providing managers with talent data that supports their company and staff needs makes it easier to identify and develop talent. • Lack of reporting - This area is often considered quite daunting but can be simplified by having a good succession plan as a foundation. Putting some © 2012 LRS Group Pty. Ltd. All rights reserved!
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CEO EXECUTIVE SERIES! simple metrics in place that tie in with business objectives is the ke y t o t h i s . Integrating succession planning into performance management is the simplest approach. There are many theories published by academia, consultants and professionals on how to put a successful succession plan and leadership exit plan in place. We will not try to navigate through these in this article. Suffice it to say that succession plans need to be tailored to individual company requirements and whilst there are some best practice guidelines these seem to be very basic and overshadowed by the many contrasting points of view. However in terms of best practice there are two basic guidelines that need to be mentioned, as follows: 1. Communication – up and down the line. Leaders within a business must be not only chosen but also developed, mentored, and cultured as well. 2. Agreed acceptance that the succession and leadership exit plan is of critical importance by the whole company and in particular by the incumbent leaders.
Succession plans need to be visible if they are to create credible and respected leaders. As a guide for succession planning the company mission statement and business objectives need to be clarified. It is critical that the current leader must help the future successors learn and lead within the company. The current leaders must also super vise the continuing success of the business and ensure their successor understands and is capable of executing business objectives and achieving the company vision. In this sense succession planning is the learning tool used by the incumbent to train and direct their successor. On a basic level the succession plan also safeguards against u n l a w f u l discrimination. The current leaders avoid preferential treatment in the succession planning stages if they are seen to use the mission statement and company objectives as his/her guide to s e l e c t i n g p o te n t i a l successors. As part of our processes upon taking the brief of a new r e c r u i t m e n t assignment at Logistics Executive, we a s k o u r c l i e n t s about their exit strategies. This question is often met
28 MAY 2012 with confusion. However our aim in asking is to seamlessly design the right skillsets and cultural fit in the role we are recruiting for, not just for the present need but for the future. It is also an acknowledgement of the incumbent leader’s responsibility to think of their replacement. Agreement at all levels that a leadership succession plan is good business practice is paramount to its success due to organizations facing increasing complexity a n d u n ce r t a i n t y i n their operating environments. In a future that is i n c r e a s i n g l y unpredictable and u n ce r t a i n i t i s t h e CEO’s who provide s u r e t y. T h e y s e e opportunity in volatility and find creative ways to na vigate problems, balance the needs of the company with social responsibility and hold on to uncertainty until the optimum time to make a decision. It is no wonder that shareholders and executives on the board to ordinar y company employees are now showing a sharp interest in the exit plan strategies and talent management of their leaders and why it is a risk mitigation strategy to have a strong plan in place for the future. .
© 2012 LRS Group Pty. Ltd. All rights reserved!
Logistics Executive www.logisticsexecutive.com Australia Sydney Phone: +61 2 8262 9800 Melbourne Phone: +61 3 9863 9488 Asia Shanghai Phone: +86 21 6427 6697 Singapore Phone: +65 6818 9745 Hong Kong Phone +852 3125 7654 India Phone +91 22 4090 7053 Middle East United Arab Emirates - Dubai Phone: +971 4 361 6275 New Zealand Wellington Phone: +64 4 496 6730
For a copy of the 2012 Logistics Executive Global Employment Report email: darrylj@logisticsexecutive.com or kimw@logisticsexecutive.com
Darryl Judd Chief Operating Officer Logistics Executive Group With more than 20 years of executive experience in Aviation, Supply Chain and Logistics Transport Industry, Darryl has held executive positions within the airline & aircraft leasing/charter industry and major logistics organizations. He is regularly called upon to manage key human resources consulting projects and supporting business to drive changes, particularly around M&A activity and international executive management.
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