The recent departure of Hewlett-Packard Co. CEO Mark Hurd highlights the absolute importance of having a strong succession plan in place. Considering that most CEO searches take anywhere between 4 and 8 months to complete, it is imperative to be prepared. In my opinion, this should be a continuously ongoing effort for every Board - if the focus is on the Shareholder and creation of value, succession planning may in fact be the most important objective of the board to be on top of at all times.
Here's the issue, however: Most Boards don't do it right. They focus intensely on "Human Capital" when evaluating internal candidates for succession. Where potential candidates are weak, training programs are put in place to shore up gaps. Yes, track record is evaluated, but at the higher levels, all candidates have accomplishments to be proud of. They wouldn't be in consideration in the first place without a progressive track record of achievement. And so it goes, the focus swings around again to the individual, to the limiting view of "Human Capital".
"By focusing on the single person, Leadership becomes part of the syndrome of individuality that's undermining organizations." - Harry Mintzberg
What "Human Capital" doesn't take into account is how the individual affects the broader network of performance. Human Capital focuses on what's 'within' a candidate, while "Social Capital" focuses on what's 'between' the candidate and the rest of the network. The difference couldn't be more profound. Most of us can recall a situation in which a highly "talented" candidate floundered in a leadership role. Why? Because it's often the case the "talent" ingrained within a candidate (i.e. "Human Capital") has little to no correlation to "trust" between the candidate and the rest of the network. When it comes to driving organizational performance, it's not about what you can do personally; it's about what you can get done through the collective efforts of the entire enterprise.
Succession planning shouldn't be an activity limited
to solely the Board, and it doesn't have to be. Better stated, the
Board should be leveraging the collective intelligence of the entire
organization, which through Social Network Analysis (SNA), can
illuminate each potential candidate's location within networks such as
the "Work Network", "Social Network", "Innovation Network",
"Expert-Knowledge Network", "Decision-Making Network", "Strategic
Network", etc. Location within a series of overlapping networks, or
knowledge layers, should be a critical consideration in selecting
[Note: Example "Work Network" map of potential successors included at the bottom of this post.]
Succession Planning through an SNA lens makes this possible.