“Strategy shouldn’t be for the present only but must address how you can take, or better still, build the future. When planning leadership succession, a crucial question that must be answered is “Who should be in charge for where we are headed?”
– Foyinsola Akinjayeju, Associate Partner, pcl.
Preparing the next generation of leaders has become more imminent than ever. Companies who methodically follow procedures of choosing new leadership are at a disadvantage. This is because the ‘new’ leaders are often incompetent and end-up being mannequins or corporate placeholders, in the centre of chaos. The economic-business-digital evolution highlights the perils of neglecting Leadership succession.
A recent Central Bank of Nigeria policy served a buffet of operating guidelines that could make or mar microfinance banks and cause corporate indigestion if they don’t act fast. Microfinance institutions have been instrumental in alleviating poverty and widening SME access to financial support.
The policy indicates that Tier 2-unit microfinance banks must meet a minimum capital threshold of 35 million naira and N50 million naira by April 2020 and April 2021 respectively while the minimum capital requirements for Tier 1-unit, State and National microfinance banks varies between 200 million naira and 5 billion naira, by April 2021.
To attain the above requirements, affected microfinance banks are expected to inject direct funds into the business, or explore Mergers & Acquisitions (M&As). As organizations seek to comply with the CBN policy, it is important to be aware of the structural changes that M&As can cause as the implications of the new policy typically cascades through the organisation. Businesses need to secure their talent management strategies to avoid unintended consequences .
M&As typically lead to new roles being created, resignations , and even retrenchment. All these changes happen at both senior and junior levels, and leave room for new talent to be hired or existing talent re-assigned.
With these impending uncertainties, defining business needs, future-proofing the organisation, and succession management are critical – as they can directly ensure continuous growth, drive continuity and help maintain market leadership.
Some of the key questions to consider in succession management include:
- Which are the key or critical positions? How should the organisation fill these key positions?
- Which positions should be replaced from within the organization, and should have at least one identified successor?
- What constitutes model performance and how can a high-potential employee be identified?
- How should organisations prepare high-potential employees for succession; and who should be involved in developing successors?
pcl. works with organisation across industries and sectors to implement effective succession planning, and organisation design and optimization, for operational efficiency and sustainability.
pcl. can assist your business to:
- Design a succession plan: reducing business risks and establishing sustainability beyond the founder(s)
- Design appropriate structure, operations & corporate governance: Aligning the company with best practices for continuity and sustainability beyond generations
- Culture alignment: alignment of the group to a common culture
- Talent Management: identifying organic talent, designing career and competency frameworks
- Talent Development: Helping your people grow