Don’t wait for openings to find future leaders

PLAN FOR SUCCESS: Peirre La Perriere, center, Gilbane Building Co.'s senior vice president, corporate director of human resources, says a lengthy time horizon for succession planning allows a company to be deliberative about its future needs and conduct a thorough search for an executive. With him are intern Alia Sasa and Tim Grace, communications specialist. / PBN FILE PHOTO/RUPERT WHITELEY
PLAN FOR SUCCESS: Peirre La Perriere, center, Gilbane Building Co.'s senior vice president, corporate director of human resources, says a lengthy time horizon for succession planning allows a company to be deliberative about its future needs and conduct a thorough search for an executive. With him are intern Alia Sasa and Tim Grace, communications specialist. / PBN FILE PHOTO/RUPERT WHITELEY

The succession-planning process for mid- to large-sized companies ideally is a continuous work in progress, and begun three to five years before a planned departure.

If the goal is to not merely avoid disruption, but to further the interests of a company and ensure a profitable future, the plan has to be malleable enough to consider unforeseen changes in the economy and emerging needs within the company, according to executives and human resources professionals.

The details of how a search is conducted, including who is involved in determining the direction, vary widely among companies. Some searches and processes are largely the product of the current CEO; others are shaped by multiple players, including current C-suite executives. The process typically begins multiple years in advance for CEO-level transitions.

Several executives interviewed recently said a sound succession plan should also extend to upper-level leadership positions within a company, to make sure the company has a deep bench to accommodate unexpected changes due to illness, resignations or internal shifts.

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And the process needs to build in time to allow for the transition to new leadership, allowing time for executives to adapt to new roles and employees and managers to adjust to a new direction and personality.

Ted Almon, chairman of The Claflin Co., has led his company for some 40 years. In February, he announced the appointment of Anne-Marie Johnson as president and chief operating officer, a new position that allows her to manage daily responsibilities while he maintains broad oversight.

Johnson joined Claflin in 1978 and previously was vice president of administration.

The process that led to her promotion was begun more than two years ago, Almon said. It included the use of executive search consultants, but ultimately, he determined that an internal promotion best suited the company’s needs. “We had a strong bias toward in-house,” Almon said.

The changes at Claflin this year set in motion another wave of internal promotions, and has re-energized the Warwick-based company, Almon said. The planning process, begun years in advance, helped provide him, then as CEO, with a broad guideline as to how to proceed.

The importance of succession planning, he said, is simply “like planning in general, it’s hard to tell in the dance when it’s going to be important.”

Gilbane Building Co., based in Providence, startled many observers in 2014 when it chose a leader from outside the company hierarchy as president and chief operating officer. Michael McKelvy was the first nonfamily member named to those positions in the history of Gilbane. Earlier this year, he became its CEO. He previously held a number of executive positions, most recently at CH2M Hill Inc.

His initial appointment came after the succession planning followed by the company’s board and C-suite leadership team identified global experience as a critical need, according to Pierre La Perriere, Gilbane’s senior vice president and corporate director of human resources.

That succession planning began in earnest more than two years before McKelvy was hired as COO and president, La Perriere said, and involved the then-CEO, chairman and board of the $3.8 billion company, which is focused on construction and real estate development.

The lengthy time horizon allows a company to be deliberative about its future needs, and conduct a thorough search for an executive who will meet those needs, he said, as well as fit into the corporate culture. The role of the CEO may be redefined, as the company transitions to a new leader. In the case of Gilbane, La Perriere said, the company leaders wanted an executive with a global focus and experience.

“It isn’t necessarily about back-filling that role as it is today,” La Perriere said. “It’s not about getting more of the same. It’s about where does the organization need to go, so we can grow and prosper and be successful?”

In the case of Gilbane, the company used a consultant to help it interview both internal and external candidates, and that outside set of eyes and ears helped the company evaluate people with a fresh perspective, La Perriere said.

The initial appointment, then later the promotion to CEO, allowed for an assessment as to cultural fit, which is often what impairs CEOs who are recruited from outside organizations, La Perriere said.

“It’s easy to find people who bring the technical expertise,” he said.

At The Washington Trust Co., succession planning takes place continuously, in part because the company has to be prepared for “what if” contingencies, according to Kristen DiSanto, executive vice president of human resources.

In 2013, Westerly-based Washington Trust hired Edward O. “Ned” Handy III from Citizens Bank as president and chief operating officer, in part to set up a potential line of succession. Joseph A. MarcAurele retained the roles of chairman and CEO and still holds them today.

“Sometimes you know or can make assumptions about when someone will be retiring, and therefore, you can plan for a smooth transition,” DiSanto said. “Other times, a departure can take you by surprise. That’s why planning and building bench strength is so important.” •

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