Ensuring a smooth leadership transition is critical to your company and your brand. Executive boards work hard to ensure that the new CEO aligns with the company’s vision, strategy, and core values. But to what extent should your organization prioritize sustainability in your succession plan?
If you place a high value on maintaining ESG criteria, then you’ll need a succession plan that ensures your new CEO understands and shares these same priorities. This includes environmental sustainability but also extends to issues such as community, labor, and regulatory concerns.
This is especially important when those outside your boardroom share these priorities. Investors, customers, and stakeholders may anticipate a new leader who maintains continuity with your past priorities — or even expands them. Here are some strategies your team can use to pursue sustainability in your succession planning.
Clearly Define Your Goals
First, it’s important for leadership teams to operate from a shared understanding of what sustainability means for their industry or local business setting. What sorts of short and long-term goals does your organization have? What current strategies are in place for reaching those goals? What are some of the major roadblocks?
Putting these thoughts to paper allows you to devise a clear vision for your company. Incoming leaders will gain a clearer understanding of what kind of initiatives they may be called to champion. Additionally, operating from a shared perspective will keep your board on the same page regarding your expectations of future leaders, to say nothing of the company itself.
When crafting these goals, make sure to consider regulatory challenges. At a minimum, your initiatives should align with these requirements and remain flexible enough to adapt to an evolving regulatory landscape.
Address the Sustainability Skills Gap With a CEO Pipeline
Before a search can ever begin, your team needs to address the “elephant in the room.” Despite the rising emphasis on ESG criteria, there remains a sustainability skills gap among senior leadership candidates.
In some cases, this is simply a matter of ignorance. Not all CEO candidates have the experience or knowledge to understand today’s regulatory environment. But it’s also true that not all CEO candidates even share a focus on sustainability.
While there’s no short-term solution, executive boards can address the problem by creating a CEO pipeline that contains candidates who share these priorities. A pipeline takes time to nurture, but that’s why your succession plan should be ongoing rather than merely driven by an immediate need. A CEO pipeline will allow you to develop leaders who align with your company’s ESG priorities and your larger vision and values.
Look for Disruptive Innovators
How do you find the ideal CEO candidate? Aim for “disruptive innovators.” These are individuals who are willing to set bold, ambitious goals in their pursuit of sustainability. Disruptive innovation will be necessary in order to move beyond small, incremental changes and really pursue more radical progress toward sustainability.
This type of innovation can be contagious. Leaders with this kind of bold commitment to innovation may inspire other C-level executives to do the same. And together, the board can look forward to a new spirit of experimentation and willingness to find creative solutions to reaching goals.
The key is to find these sorts of disruptive innovators and keep them a part of your leadership pipeline. To identify these types of leaders, look for those who share the following qualities.
They Ask Tough Questions
Disruptive innovators ask difficult questions with confidence. These leaders aren’t afraid to push back against the status quo and ask: “Why can’t we do things a different way?” This isn’t just change for the sake of change. A disruptive innovator understands the industry well enough to shake things up and strive for continuous improvement.
This, of course, is crucial. “Disruption” is nothing without “innovation.” The best leaders ask tough questions not only to destabilize the way things currently are but also to introduce strategies that lead to a more secure, sustainable future for the company.
They Learn From Their Mistakes
Disruptive innovation can be a bit of a paradox. Sometimes, the bolder the leader, the greater the chances of getting things wrong. That’s not a character flaw — it’s simply a by-product of trying new things. The only real alternative is a CEO who plays it safe and allows leadership teams to think and operate as they always have. But that never leads to innovation.
At the same time, you need leaders who can look back at their mistakes with a wincing smile. These mistakes can become learning experiences, and leaders should be able to describe failed initiatives and identify where things went wrong or what they might have done differently now that they have the benefit of hindsight.
They Are Comfortable With Uncertainty
By definition, new ideas are those that have never been done before. But that creates a lot of uncertainty regarding the effectiveness of any new idea. Disruptive innovators, therefore, must be comfortable operating in uncertainty.
This also means that disruptive leaders will need resilience, as not everyone will handle this uncertainty in the same way. Bold leaders need the courage to push back against naysayers who question the direction the company is taking.
Confidence in the face of uncertainty can accelerate change and drive a company closer to its sustainability goals, but only when leaders take an active role in navigating the unknown and maintaining sight of future possibilities.
A Bold Vision for Your Future
If sustainability is a priority for your company, it must be a priority at the highest levels of leadership. Most succession planning focuses on skills related to the industry or finances. However, it’s increasingly important for executive teams to seek out new CEOs who fully embrace sustainability goals and align with your company’s shared vision.
By nurturing a CEO pipeline full of disruptive innovators, you’ll be better equipped to fill this senior role with a leader who will boldly and confidently approach the future and inspire others to do the same.