Spurred on by global growth, global competition, and the recent economic crisis, companies are restructuring themselves more frequently and more rapidly. Such frequent dismantling and reassembling of a company's organizational structure creates gaps in leadership at all levels in the organization. Filling these leadership gaps in this type of environment is a great challenge for today's fast-changing companies.
The Institute for Corporate Productivity (i4cp) paper, "Succession Planning Highlight Report," found that 34 percent of organizations with more than 10,000 employees are not prepared to fill their leadership roles. The report also concluded that succession planning will be among the top five challenges executives face in the future.
Companies traditionally use succession planning for identifying employees who are best suited to fill leadership vacancies at the executive and C-levels. The identified successors are groomed for a long period to transition into these roles, which are expected to develop from attrition. However, this model does not meet the needs of companies that must adapt to the speed of change that occurs in today's business environment.
A matter of time
The rapid organizational restructuring required to survive in the global economy strains the capability of succession planning to quickly fill the large number of leadership gaps that are created. Companies do not have the time required by traditional succession planning to close these leadership gaps. In a March 2009 T+D article titled "Successful Leadership Transisition", long-term investment is cited as one of the barriers to successful implementation of succession plans. As a result, not enough successors are prepared to transition into the vacancies created during reorganizations.
Rapid organizational restructuring can also dramatically change the leadership needs at the middle and lower levels of a company. Unfortunately, traditional succession plans usually neglect to address leadership gaps at these levels. A more rigorous and structured approach to succession planning (one that focuses on preparing all employees for leadership roles, not just those who are on the CEO track) could improve the speed at which companies transition to new organizational structures.
When traditional succession plans fail to fill leadership vacancies after a reorganization, companies have no choice but to place employees into leadership roles with little or no preparation to take on the responsibilities of leadership. Unprepared leaders disrupt the building of strong management teams required to ensure that the goals of the reorganization initiative are achieved.
In addition, poorly filled leadership roles at the middle and lower organizational levels disrupt the team cohesion necessary to sustain performance during a reorganization. Frequent restructuring, however, creates more than just gaps in leadership. It also creates gaps in the collective knowledge of a company.
The knowledge factor
When leaders shift from old to new roles, the tacit knowledge regarding a team's group norms, communication styles, relevant incentives, and other factors, moves with the leader transitioning into her new role. This shift creates gaps in the corporate knowledge that develops along with a leader's experience.
In companies that frequently reorganize, new leaders transitioning from leading individuals to leading teams or groups of teams have little time to gain this tacit knowledge and must start from scratch to discover how to best manage larger numbers of employees. Thus, the knowledge needed to successfully perform the job duties of a leader is lost to the employees (those most in need of it) and to the organization.
In addition, employees placed into new leadership roles are not usually given any training before they begin working in their new role. …