Smoke and mirrors: The fallacy of technology succession planning?

Many of our conversations can be reduced to a lack of confidence from both technology leaders and the companies they work for in their leadership.

From a business perspective, potential CIOs/CTOs are not viewed as having the requisite breadth of experience sought after by the firm, are often viewed as an unknown quantity by the Board and can be seen as a risk when compared to a “proven” external CIO. As one CIO said, “Why would my board trust a first time CIO with an £8bn organisation?”

From a technology leadership perspective, and CIOs/CTOs are seen as failing to elevate the profile of their potential successors, meaning that the prospective candidates are not always well known or trusted by the wider business and, therefore, the Board votes to search externally.

Equally, most non-executive directors are over ten years out of an executive career, which is an “ice age” in technology terms. They often do not understand the function, nor know exactly what they want from their CIO/CTO. Attaining more technology representation in the Boardroom to help elevate and drive greater rigour and understanding of the topic and its leadership is important to change this dynamic. A FTSE CIO shared that he works closely with the Chief People Officer to drive a digital and data education programme for the Board, elevating the Board’s knowledge and understanding in this area, which, in turn positively impacts their relationship and perception of technology talent.

In parallel, as one non-executive commented, there is “no normal left anymore,” we live in the “never normal” – technology is too dynamic for businesses to keep up from a talent perspective. The pace of change within technology is relentless and “unless you have a very stable BAU organisation, predicting what you need in two to three years’ time is impossible as the pace of change is too great.” therefore, any prospective CIOs are unlikely to have been skilled for the next iteration of technology change, simply by dint of having been in the company itself (unless they actively build external networks and knowledge).

One CPO declared that “succession planning is still too often a paper exercise to satisfy a process.” If organisations’ genuinely want to create talent pipelines, technology leaders and their HR partners need to collectively take more ownership of the succession process.

A common theme across those we interviewed who felt comfortable with their succession pipelines was that they had proactively put in place structured development paths for their key positions. These were multifaceted, combining practical experiences with supplementary leadership training/coaching. They included specific mechanisms to give aspiring leaders greater Board/investor exposure, and they were reviewed multiple times per year to monitor progress and course correct or iterate, as necessary. Succession candidates were also benchmarked against the external market to instil confidence in the stakeholder community that the right person is sitting in the seat.

Technology teams move faster from a change perspective than other functions which coupled with a rapidly changing macro environment will always create acute short terms needs in talent. Regardless, firms need to stop hiring only for the present, and build longer term succession planning support that spans three to five years. Leaders need to be assessed on their commercial acuity and stakeholder management and influencing skills even if the immediate role is more technical in nature. A culture of continuous learning needs to be fostered and developed from the grassroots to the very top of an organisation ensuring there is time and space for potential successors to grow.

Genuine succession planning requires rigour and discipline, longer timescales, and more structure around it – which it transpires few firms have. CIOs/CTOs need to keep up to date with the external landscape, be constantly reskilling and looking at the horizon; few are given the space to do this when set against the challenges of their day job but without a constant watch on the external environment they will invariably be seen as less compelling when compared to external appointments.

Internal succession must also be validated by external comparison. If the prevailing perception is that external options will offer more value than home grown talent, then the leaders who have benefitted from structured development programs must be benchmarked against the external environment to provide comfort the right decision is being made. Many of those we spoke to stressed the importance of running external searches or mapping exercises to properly illustrate the strengths and weaknesses of a potential CIO successor.