Succession planning at the Principality- that's the way to do it

The big news in the Cardiff business community is that Graeme Yorston is to succeed Peter Griffiths as the CEO of the Principality Building Society #.  Griffiths, led the society for ten years (of which the last four have been incredibly difficult for the industry) and in a style and way that has enabled the Mutual to avoid the problems and bad publicity affecting other financial institutions.

This news, got me thinking . So how do you replace such a capable leader ? What is the process ? Was Yorston the only person to be considered ? Had the resignation of Griffiths forced the board to think of a successor ? Or had the board been proactively thinking about, when this day arrived, who would be stepping into Griffith’s shoes ?  Essentially what these questions are attempting to discover is whether there was a succession plan.

So if you were being proactive and planning for the CEO’s departure how would you go about putting in place such a plan and what would be involved ? Four years ago I wrote my CIPD Management Research Report,  “Future Proofing The Organisation” on  how do you succession plan?

Essentially the steps to follow are:

Create a written succession plan – with the primary goal being the development of internal successors. Additionally emergency succession procedures should be included, to cover  situations such as sudden death or long term sickness of the CEO.

Develop a required set of capabilities -  compare the resulting list against the firm’s senior talent pipeline. Ensure that the board has regular exposure to internal candidates through presentations, field observations and site visits.

Conduct regular in depth reviews – the entire board with the senior HR executive should review the plan twice a year to make sure that it continues to be fit for purpose in the light of the ever evolving business environment and company strategy.

Narrow the field down to two or three contenders – this should occur about two years before transition.

Implement the plan, about a year before the anticipated departure through:

• Indepth competency focused interviews
• 360 degree feedback
• Psychometric Testing

Then finally the board should make it’s decision

And that’s all there is to it ? Did the Principality follow this methodology, my guess is probably yes. Good luck to Yorston in his new role.

# The Principality is 7^th Largest Building society in the UK and in the past 6 months attracted £160M and 28,000 new customers in the first 6 months of this year.