A horse race is one of the oldest sports. Its origins are obscure, though archeological evidence suggests that it was practiced in Egypt, Babylon, and Syria. Eventually, racing became a spectacle with large fields of runners, sophisticated electronic monitoring equipment, and a lot of money. In the 21st century, however, the popularity of racing has waned.
One of the first documented horse races took place in France in 1651. That year, a wager was placed between two noblemen. The winner would be offered a silver cup. After the Civil War, speed became the goal. Since then, horse racing has evolved from a primitive contest of speed into a huge public entertainment business. Today, many companies use horse races to select their next leaders.
In the United States, the Belmont Stakes and Kentucky Derby are considered the “American Triple Crown.” A Triple Crown is a series of prestigious races. Generally, the prize money is divided among the first, second, and third finishers.
Another advantage of a horse race is that it provides a tangible way to demonstrate your organization’s commitment to leadership development. For example, General Electric has produced a long line of exceptional leaders from a succession process that began with a horse race. This has served as a powerful motivation for employees to take responsibility for the company’s performance.
Despite the benefits of the horse race, some executives are uncomfortable with its use. Some believe that it has a lingering effect on a company’s ability to fill key management roles. Other directors fear that a protracted succession process will reduce business momentum.
However, a successful company can create a succession culture that helps high achievers become leaders. A succession culture is a series of processes that align the skill sets of the next CEO with the vision and strategy of the company. These include benchmarking frontrunners against external talent, ongoing development of promising executives, and ongoing alignment of the best leaders with the company’s future.
Succession cultures have been a boon to companies, paving the way for some of the greatest executives in business history. However, some executives are concerned that a succession process will tarnish a company’s culture. As a result, it’s important to understand the nuances of a particular organization before committing to a succession plan.
Ideally, a board should conduct a thorough analysis of the company’s culture. Boards should be aware of the capabilities of senior leaders, and consider whether a particular candidate is a good fit for the organization. They also should consider the organizational structure and resource sharing of the company. Regardless of the decision, it’s critical to develop a strong succession plan.
Although the classic succession “horse race” pits two or three senior executives against each other, a company’s culture can determine which candidate stands a better chance of winning. While the horse race may seem trivial, its effects on a company can be long-lasting. If a company chooses a particular candidate, other senior-level leaders could be pushed out of the way.