Are succession plans failing diversity targets?

Just six FTSE 100 CEOs are ethnic minorities. How can businesses improve succession plans to better support DEI

In 2015, FTSE 100 organisations were set targets to have at least one director from an ethnic minority background on their board by the end of 2021. The Parker Review now expects that 94 out of 100 will achieve this goal by May 2022. Problematically, most ethnic minorities in board positions still only hold non-executive director roles, and just six are chief executives.

Similarly, women make up just 23% of executives globally. By comparison, 29% of senior managers are female – as are 37% of managers, 42% of professionals and 47% of support staff. For many groups, representation is higher at entry level but becomes increasingly less proportionate further up the chain. 

Importantly, this data highlights a common pitfall in succession planning: its inability to promote underrepresented talent. Seemingly, the problem does not stem from a lack of pressure to succeed. Indeed, louder voices and increasing demand means many investors are now calling for action. There is now a greater understanding of the inherent threat that an unrepresentative board, with little diversity of thought and experience, presents – not only to employer brand but also to business operations. 

So, why, in 2022, when DEI is higher up the social and business agenda, are succession plans struggling to bring about meaningful change?

Leading with data to overcome human biases

For many organisations, diverse succession planning falls at the first hurdle, with those in charge of the process falling victim to their own unconscious biases. Indeed, this is a problem for many hiring managers and talent teams and execs who maintain a traditional view of the individuals, skills and experiences that make up their “ideal” leadership personas. 

Since 88% of DEI leaders identified bias within their promotion processes and succession planning, unconscious bias is the stumbling block that halts even those with the best intentions. 

Objective succession planning

Overcoming this requires two responses. The first is unconscious bias assessments and training (not only to locate and understand where unconscious biases lie but to educate and actively tackle these biases within the organisation). The second is a succession strategy based on data. 

Data is the objective reference point for planning. It can reveal the makeup of your workforce, individuals with high potential, particular skills and areas of experience, and the barriers faced by underrepresented groups (and key opportunities to support them). Understanding this landscape avoids only identifying and promoting employees who have been exposed to networking or key learning and development opportunities – possibilities that aren’t always easily accessed by certain groups.  

Beyond this, an internal assessment of cross-sectional data between departments and managers can reveal the cultural barriers within an organisation. Analysis of DEI policies and procedures, as well as day to day working practices, can uncover routine processes that block opportunities for underrepresented groups. 

Finding the data sources

For meaningful insights, organisations need systems with three to five years of people data. Considering diversity targets have only recently been widely prioritised, many organisations don’t have the necessary systems, analytics teams or span of data.

However, other processes can be carried out to ensure that data and real insight remain the bedrock of succession planning. Consider instead, having regular conversations with employees and candidates to uncover their needs and areas of development that could be supported. Market research from marketing and customer knowledge teams may also reveal wider market insights about the state of talent, DEI and hiring in your industry. 

Switching up internal processes

Once the data sets and internal assessments are established, steps can be taken to proactively switch up the identified processes hindering DEI in your succession plans.

Expanding Qualifying criteria

One commonly identified problem organisations face is ‘hiring in their own image’. In this case, hiring teams and execs recognise the skills, experiences and education of their current board as key to success. As a result, they fail to diversify from these criteria when seeking new leaders.

Problematically, many underrepresented groups have less access to certain types of education. At the same time, their experiences and backgrounds are likely to differ dramatically from the typical board members of the past decades, decreasing their chances of leadership selection.

Organisations keen to diversify leadership will ensure they expand the qualifying criteria within their succession plans. To do so, when assessing candidate capabilities, don’t focus so highly on experiences, education or technical skills. Instead, look at candidate behaviours and values – adaptability, curiosity, and an ability to motivate teams. These attributes can reveal the true leadership potential of candidates while creating opportunities for those who have not had equal access to specific training or experiences. 

Looking further down the pipeline 

Where hiring teams looking for future leaders within their organisations is another common issue requiring reviewing. If the analysis reveals that underrepresented talent commonly sits several layers below exec positions, succession plans should start here to ensure that diverse groups at all levels have the opportunity to be promoted up the ladder. 

Focusing on early career talent will also ensure succession plans work in the long term – identifying, aligning and supporting talent that may be a leader beyond a business’s typical 3-5 year plan.

Looking to external talent

In a highly competitive talent market, organisations recognise that external talent can be the key to successful succession planning, bringing in underrepresented talent more quickly than internal talent can be developed. However, potential biases within hiring processes should also be reviewed to better support external talent to reach executive positions.

Adapting hiring practices

Simple actions can taint hiring processes with bias. Conversations between first and second stage interviewers can influence opinions on candidates before the second round of interviews even takes place. Hiring managers who unknowingly hire in their own image can also undermine the chances of underrepresented talent from entering an organisation.

Take simple steps to switch up procedures: bring in an interviewer or external consultant who is unbiased, for example. On top of this, prevent internal conversations about candidates in between interviews. Overall, ensure that interviewing and onboarding processes seek to tackle bias as much as promotional ones to create a well-rounded succession plan that encourages diversity.

Finding external talent in new places

Looking for diverse candidates can also mean fishing for talent in new ponds, avoiding traditional universities or networks that yield similar candidates with similar experiences.

Due to the current competitive job market, more organisations also recognise the need to search outside of their industry to secure top talent. This can also positively impact securing diverse leadership. Shifting the focus of talent searches from industry experience to values, behaviours, and leadership potential can open up opportunities for underrepresented pools of candidates and future leaders and for the organisation to learn from new talent, their diverse backgrounds, and different skill sets.

While targets continue to push FTSE 100, 250, and Fortune 500 organisations on their DEI efforts, organisations of any size should review their succession plans. Doing so provides underrepresented talent with better opportunities for career development. It also ensures that leaders are truly representative of the organisation’s people and customers and can better lead into the future.

Peter Howarth, Co-Managing Director at Armstrong Craven

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