Succession planning is a vital ingredient for ensuring the long-term health and viability of your company. While many leaders understandably consider it desirable to promote from within, it’s always advisable to look outside your business, too.

Case for External Candidates

The lure of internal candidates can’t be overstated. It’s generally less risky to promote someone who’s already familiar with your company and its culture. Promoting from within also is good for morale, recruitment and retention. And it’s often both cheaper and faster than looking outside the business.

But external candidates can bring different perspectives and new ideas that drive innovation. They might have skills and expertise not currently found in your company. For companies that want to move in a different direction, insiders might not be able to create the necessary “disruption” to do so.

The Hunt for Potential Candidates

Of course, you may find it more challenging to identify external prospects for your top positions. You’ll likely need to use tools such as executive search firms, job boards and professional associations. In addition, you should consider individuals who presently work for your competitors, customers, vendors and consulting firms.

Many large companies make it a practice to “raid” other organizations that are well-known for developing strong leaders. Don’t limit yourself to your industry, though. Executives from different industries can boast relevant experience that you need to move your company forward.

Note, too, that the identification of potential external candidates who could fill openings in your C suite should be an ongoing process — ideally, you can build a bench of external candidates that you can tap into in the future. For example, you should cultivate contacts made at industry events and meetings.

This extra networking may be worth the effort because few companies can effectively fill all of their executive jobs with internal candidates. Maintaining a list of potential external candidates likely will save you time and money down the road when openings arise.

Vetting Process

The effective evaluation of external candidates calls for a team approach; it shouldn’t be left to one person or HR. If appropriate, include the person who will be replaced as part of the evaluation team, as well as some employees who work closely with that position, both above and below the job on your organizational chart.

Start the evaluation process by defining the requisite qualifications, including the hard and soft skills, competencies and experience. You can consult existing position descriptions, performance evaluation criteria and competitors’ ads for similar positions. The qualification list also should account for opportunities or challenges that might arise for your company. Keep in mind, too, the more subjective qualities that are critical but don’t necessarily appear in such documents (for example, cultural fit and reputation).

The qualifications list should guide the team throughout the various evaluation stages (for example, resume review, interviews, tests, work samples and reference checks). Regardless of the stages you use, you should apply them uniformly to all candidates, external and internal.

After a candidate has been selected and in the job for a while, it’s wise to assess the evaluation process itself. How effective was it? Were the costs appropriate? Can it be streamlined or otherwise improved for future searches? Again, this is a process that should incorporate input from a variety of stakeholders, possibly including the selected candidate (depending on factors such as whether the hiring is regarded as successful).

Cover Your Bases

Even if you ultimately end up going with a current employee, an external search will demonstrate due diligence and provide valuable benchmarking. Contact our executive search group for more information. We can help you identify and evaluate qualified external candidates who will improve the thoroughness of your succession planning process.