In today's rapidly evolving business landscape, boards of directors are more than just stewards of governance—they are the strategic compass guiding an organization toward enduring success. As the challenges facing companies grow increasingly complex, from disruptive technological trends to shifting societal expectations, the board's role has never been more critical.
This series is designed to empower board members with the insights and tools necessary to navigate change with confidence. Our experts, each a leader in their respective fields, will share real-world examples, practical frameworks, and actionable advice in a Q&A format, as well as lessons learned from their personal and professional journeys.
Succession planning and developing future leaders
For the latest installment of our board leadership series, BerryDunn Director of Executive Recruiting, Sarah Olson, shares key insights on leadership transitions, including identifying high-potential employees, offering internal leadership development, and prioritizing the development of a strategic succession plan.
Q. What do you consider the most critical elements of a successful succession planning strategy for leadership roles?
A. There are several elements to succession planning, and the first one is clarity—being clear about how you want people to perform in your organization. You want to be consistent when eyeing possible internal candidates for leadership roles, and you want to make sure that you are developing them for future success.
Once you identify a potential successor for a leadership role, you want to make sure that you look at the skills they have today that they will need to take on that next-level role. You want to make sure you have the training, coaching, and mentoring in place to allow that person to grow into the role. The employee also needs to have a clear understanding of where the organization is going because if we just look at people to take over roles as of today, as opposed to the future, then you are not going to have the skill set that will allow the organization to grow.
Finally, you must plan. It takes thoughtful discussions, and often it requires outside consultants to assist and keep you on track. It's easy to get caught up in the day-to-day of the organization and think that this is just going to happen without any pre-planning. But that's not true. It requires a solid plan to get you where you want to be.
Q. In your experience, what are the biggest challenges companies face when preparing for leadership transitions, and how can they be mitigated?
A. Planning. Leaders might know they want to grow the organization, but they don't always have the road map to get there, and succession planning for that growth is a key element. You need to sit down and be willing to talk openly about what this is going to look like from a transition standpoint. As an example, let’s consider an organization that unexpectedly loses its longtime CEO and has no succession plan in place. Not having someone marked to take over such a critical role is a huge disruption. As a result, they find themselves unable to make decisions that should have been addressed long ago. This puts the organization in a difficult position, and it will take time to move forward because no prior planning or consideration was done. It’s exactly the kind of scenario an organization should avoid—major transitions need intentional, proactive planning.
Q. How do you assess and prepare internal candidates for C-suite readiness while maintaining confidentiality and minimizing disruption?
A. It’s a struggle because not everyone is suited to take on that next-level role. Sometimes people reach a ceiling, but they may think that they can do more. Organizations must be clear about expectations, development, and skill sets—both current skills and gaps. If you are looking at an internal candidate for a potential leadership position in the future, you have to understand where they need to grow and tailor a growth plan for them through stretch assignments and training. You must be transparent about what you're doing. If someone is thinking that they're going to be taking on a leadership role, but they really don't have the skill set to do so, you need to be open to having conversations with them about those gaps. This includes sharing how they match up against others, without naming names, and making sure they understand what they must do to get to that next-level role, and whether they are even capable of it. You have to be realistic with them. These are difficult conversations, which is why most people avoid them. If you're not honest up front, it can cause angst and resentment down the road.
Q. How do you identify and develop high-potential employees for future leadership roles without creating perceptions of favoritism or exclusivity?
A. You need to be transparent and upfront about their capabilities, as well as where they need to grow and if they need training. Giving them a stretch assignment and analyzing their reaction can tell you a lot. If they really struggle with the assignment, you can have that conversation. You can explain that you are looking at everyone's capabilities, and this project didn't go as expected, which tells us that you're not ready yet. Here, you can offer the employee feedback on what they need to do to reach the leadership level.
Q. In your experience, how can organizations balance the need for external executive hires with the development of internal talent pipelines?
A. You need to really go back to your awareness of people's capabilities. If you don’t have anybody in the organization that can fill the vacant leadership role, and if you’ve never made a succession plan, then you need to view it from a recruiting standpoint. What’s the pipeline out there for talent for C-suite positions? Leaders in an organization can start by networking with others in the industry, with an eye for potential talent for the future.
You need to always look towards that future vision, making sure that you're networking early and often. You've got to think deeply about whether you've done your succession planning. If there is no one that you're seeing who you can tap to take on that role, no matter how much development you do with them, it’s time to look externally.
Q. What role does mentorship or coaching play in effective succession planning, and how do you structure those programs for impact?
A. Coaching and mentoring play a significant role in most employees’ development. How do you help them become their best selves and advance their careers? Growth can’t rely solely on external training or earning additional degrees. It also comes from observing and modeling the behaviors of others—whether leaders or colleagues who have done the work before. You can’t overlook the skills, knowledge, experience, and education people already bring to the table.
It’s especially frustrating when a long-term employee leaves and, when asked about their replacement, you discover that little to no effort was made to capture that person’s organizational knowledge. Too often, their expertise wasn’t transferred to anyone else. When they walk out the door, their institutional knowledge disappears with them. While starting fresh isn’t always a negative, in many cases, it forces the organization back to square one, requiring more time and effort. With proper foresight, that knowledge could have been captured, documented, and shared to make the transition seamless.
Q. What strategies do you use to ensure succession plans reflect the organization’s long-term strategic goals and evolving leadership competencies?
A. There needs to be alignment with your strategic plan. If you haven't executed a strategic plan, you need to make sure that you create one so you grow in the right direction. You want to make sure that the right people have the right skill sets for that growth. Succession planning should link directly to the organization's mission. Vision and strategic priorities can't be separated. Watch for methods used to anticipate future leadership needs, including emerging skills, leadership styles, and industry trends. You want to know where other organizations in your industry are headed and what tools they are using. What people are they tapping into? What new services are they offering? Make sure that your development program is solid and that it contributes to finding strong leaders in your organization. Have a robust mentoring program and training opportunities, and make sure that you're identifying those high-potential employees and have a conversation with them about the future. This is important because you don’t want a high-potential employee to leave thinking there is no future growth for them at the organization.
Also, look for ongoing evaluation methods of talent reviews, performance metrics, and feedback loops that are going to ensure that your succession plan remains relevant over time. You're always going to be looking at that plan and updating it. Adaptability is also important. You have to stay relevant, making sure that you're changing over time to fit the needs of the organization today and in the future.
Q. How do you measure the effectiveness of succession planning efforts in terms of leadership readiness, retention, and organizational resilience?
A. It's important to track the number of key positions with at least one successor identified. You need to very succinctly look at each position and determine who your high-potential employees are for that role. Evaluate those successors through performance reviews and feedback loops, doing assessments and simulation exercises, such as what-if scenarios. Examine how often an internal candidate is successfully promoted to a leadership role compared to filling it with an outside candidate. From a talent management perspective, you want to keep a healthy balance between the two.
Measure retention and consider your turnover rate, as well as what is causing it. What needs to be adjusted? Make sure that you know where all your employees stand, that your high performers know they're high performers, and that you're having conversations with them to let them know how valuable they are.
The resiliency of an organization is another big piece. It’s essential to make sure that the organization can adapt to unexpected changes caused by departures or role transitions. You don’t want a change to cause a panic situation; you want to be prepared for the unexpected.
Q. Looking ahead, how do you see succession planning evolving in response to changing workforce demographics and leadership expectations?
A. Succession planning is becoming more strategic and forward-looking. Organizations are increasingly recognizing that failing to plan creates significant challenges. They must prioritize diversity, skills, and potential—not just tenure. A shorter-tenured employee can still be a high-potential performer who brings valuable perspectives. In fact, the two-year employee may be a stronger leadership successor than someone with 30 years in the organization, depending on their broader experience and background. Length of service alone shouldn’t be the determining factor. The workforce itself is shifting: the population is aging, and fewer young workers are entering the pipeline. Organizations must stay laser-focused on what this means for their future and for their industry as a whole.
It’s also essential to be clear about your organization’s values, especially at the board level. Boards can’t sit passively and assume the organization will take care of everything—they need to ask thoughtful, informed questions to ensure long-term stability, success, and readiness. The more intentional the planning, the stronger the organization becomes. Boards should be accountable for understanding and overseeing the organization’s critical processes.
About Sarah
As Director of Executive Recruiting, Sarah partners with clients to create high-impact leadership teams that support an organization’s mission and culture. Drawing from more than two decades of recruiting experience and a large network of professionals, she has the knowledge and resources to help connect clients with the best talent for their specific needs. Learn more about Sarah.
BerryDunn partners with organizations to create work environments where business success and personal growth coexist and where people are confident knowing their workplace positively contributes to their well-being. We take a comprehensive approach to our workforce and well-being work, considering how business needs, organizational capacity, and the employee experience work together to drive your business forward. That’s why we initiate each executive search by learning our client’s values—allowing us to find a candidate who shares those values while also meeting technical qualifications. Once we understand a client’s culture and business demands, we go beyond the pool of “available” executives and turn to our deep resource network to find the ideal candidate. Learn more about our executive recruiting team and services.
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