In my role as Executive Search Director of Hunter Scott, I often have conversations with boards of real estate companies around the suitability of a current or potential CEO. I find considering the following to be helpful:
- Is the chosen CEO successor still the right person for the role?
- Is the job brief for the candidate successor to the CEO successor still applicable?
- Are potential successors prepared to assume the role of CEO?
- Do you have an updated list of external successors, which also enables you to benchmark internal successors?
- Do you have the right leaders on the Executive Team to ensure your company has the best chance at being successful?
- Is the board aligned and ready to have succession planning conversations to assess immediate and longer term needs?
Why?
Because having these conversations early on prior to instructing a search firm to work on your behalf can save a considerable amount of time, energy and money further down the line. It can also help streamline the process when you are ready to start the search by enabling everyone involved to be on the same page prior to candidate engagement.
How C-Suite succession “benching” can be helpful
“Benching” is an industry term for placing candidates into a talent pool for future conversations. This talent pool can then be used for external CEO succession benchmarking, providing companies with a current snapshot of the best CEO talent available in the marketplace. This information can be an essential part of the jigsaw for some real estate firms to reorganize and restructure their leadership team. Further, it can help realign divisions to accommodate the “New Normal”. Succession benches are also essential for direct reports of a CEO. They prepare for unexpected, planned, and forced departures as well as scout talent for new executive roles.
In the emerging economic downturn, particularly since the Covid pandemic, many real estate boards both in the US and UK have been forced to review their projections about how resilient they would be in a crisis This often means reviewing their CEO succession plan. What checks and balances are in place to ensure long-term strategy is not derailed and who is preparing the ship to be steered through potential murky waters that lie ahead? Discovering you were not as prepared as you would have liked can be a catastrophic mistake. That is why succession benches have become a strategic imperative in the age of COVID-19.
Fewer internal successors available
Many real estate companies have flattened over the years. The number of managerial levels have decreased. With fewer levels, the rungs on the corporate ladder have stretched further apart. Consequently, when executives climb the corporate ladder, they step into new roles with drastic increases in responsibility and scope. Without intermediate levels to serve as corporate training wheels, it is too easy for new corporate executives to fail.
Fewer internal successors combined with a higher risk of failure means there is only one place a company can go: outside. Companies must improve their succession planning bench strength with outside candidates. External benches are an effective way to tee up additional potential replacements for senior-level executives and to ensure continuity of leadership.
Hunter Scott is a boutique executive search firm founded with a focus on delivering the best real estate talent the market has to offer, leveraging years of expertise in real estate search. We work with real estate funds, private equity firms, REITS, lenders and sovereign wealth houses in Europe and the US to achieve immediate and sustainable results. Each client is treated as “partner” with the view to create long-term value.
For more information on how executive benching can help your company, please contact Lucy Winberg confidentially on +44 (0) 208 146 9754 or +1 (212) 210 2285.