Few Companies Integrate Management Succession with Strategy

Jan 24, 2019

By AMA Staff

Less than one in ten large organizations integrates management development and succession planning with strategic business objectives, according to a survey of 1,098 senior managers and executives by AMA Enterprise

The survey found that North American companies take a variety of approaches to succession planning in terms both of management development and overall corporate strategy, according to Sandi Edwards, Senior Vice President for AMA Enterprise, a division of American Management Association that offers professional services and tailored learning programs to organizations. “Integrating leadership development and succession planning with strategy is the gold standard today, yet it remains a far off hope for many organizations. Even more disturbing is that, in the view of respondents, nearly half of the organizations don’t even seem to be seeking to achieve this best practice.”

Which of the following best describes the management succession planning at your organization?

  • 8%—We have a comprehensive development program integrated with our strategic business objectives.
  • 17%—We have a formal management training program based on development of specific competencies.
  • 18%—We have a succession plan intended for a sudden loss of key senior executives.
  • 23%—Management succession at our organization seems to be primarily an exercise conducted by our HR department.
  • 23%—Our organization does not do succession planning.
  • 11%—Don't know.

According to the findings, only an estimated 8% of companies have a comprehensive development program integrated with strategic business objectives, while the focus for 17% is primarily on training and development of specific competencies. For another 18%, such planning is focused more on replacement of key executives.

At nearly one-quarter of organizations (23%), management succession is principally an exercise conducted by the HR department, according to the survey. One-quarter reportedly do no succession planning at all.

According to Edwards, integrating both development and succession planning with overall business objectives may be transformative. “A leading global medical device company based in the U.S. recognized that despite having offices in many countries, its products were not being consistently sold across key markets. Its representatives were focused narrowly within their own geographies and there was minimal global teamwork. The company wasn’t able to effectively leverage its worldwide talent or potential. At the same time, the company found that only one-fifth of its high-potential managers had the global understanding or leadership skills to be promoted. After implementation of an ambitious global leadership initiative, part of which focused on global information sharing and teamwork, that percentage was doubled, giving the organization a far greater depth of global management potential. Here was a case where development and a succession planning policy fueled the company’s business strategy.”

AMA Enterprise conducted the online survey in order to probe perceptions of corporate bench strength as well as management succession preparedness. The study population consisted of primarily senior-level business, human resources and management professional contacts drawn from the AMA. Ninety-six percent of respondents were from U.S.-based organizations and the balance from Canada.

With more than 85 years’ experience and headquartered in New York, American Management Association (www.amanet.org) is a global leader of comprehensive talent development. AMA Enterprise, a specialized division of AMA dedicated to building corporate and government solutions, transforms enterprise-wide talent to fuel a culture of innovation, high performance and optimal business results.

About the Author(s)

AMA Staff wrote this article based on an AMA survey finding.