Voya Investment Management likens successful succession planning to a waterfall.
When its CEO said in 2016 that he was leaving to take a position with another firm, the firm moved quickly and promoted from within, naming Christine Hurtsellers to the top spot.
That promotion set off a cascade of changes, with Matt Toms moving into Ms. Hurtsellers' former role as chief investment officer, fixed income.
"We saw a long waterfall effect — the CEO of the organization changed, was promoted from within from CIO of our fixed-income platform. That person stepped up and a variety of other people stepped up," said Michael Pratt, head of human resources for the investment business, based in New York.
"We probably hired to (the) analyst level" due to that preparation. "We were able to implement multiple succession plans without a lot of angst because we had plans."
Voya is not alone in recognizing the importance of succession planning to its business. Among the 69 firms named on Pensions & Investments' 2018 Best Places to Work in Money Management list, just 11 said they do not have a formalized program and/or practice for succession planning.
To craft succession plans and ensure that employees are ready to move up when positions present themselves, firms take a variety of approaches on both an annual and ad-hoc basis, including senior leadership meetings that plan for transitions as well as work shadowing and personal coaching to build skills of lower and middle mangers.
At Voya and Chicago-based Adams Street Partners LLC, for example, the work to iden- tify tomorrow's leaders takes place on an annual basis.
Carolyn Flanagan, partner and head of human resources for Adams Street, a private markets firm, said its process "drives future staffing and development priorities for a variety of key roles at the firm."
When it comes to the managing partner role and other executive-level positions, the firm seeks advice from its independent board of directors, made up of retired money management executives "who have overseen and taken part in succession planning, and are able to provide an experienced point of view on the best practices in the industry," Ms. Flanagan said.
Added Jeff Diehl, managing partner at Adams Street: "Additionally, our annual succession planning exercise holds senior managers accountable for crafting staffing plans and developing their high-potential team members with the expectation that progress is noted on a year-over-year basis."
That planning helped Adams Street make the transition with the onset in 2014 of a process to communicate that T. Bondurant French planned to step down as managing partner at the end of 2017. The firm's succession and communication process included a formal letter shared with clients, partners and friends of the firm in 2015.