Succession Excellence: Navigating the Complexities of C-suite Continuity – Iker Zubia Vazquez

In today’s rapidly evolving business landscape, the strategic importance of robust succession planning within the C-suite cannot be overstated. “Succession Excellence: Navigating the Complexities of C-suite Continuity” is a dedicated campaign that delves deep into the nuances of ensuring seamless transitions in top executive roles, informed by the rich insights of Chief Human Resources Officers (CHROs) from leading organizations.

At the core of every successful enterprise lies a dynamic and resilient C-suite and leadership team, equipped to guide a company through immediate challenges and drive long-term, sustainable growth. Achieving and maintaining such leadership continuity amid inevitable transitions and uncertainty driven by technological advances such as AI among other aspects presents a host of complex challenges that require careful consideration, strategic foresight, and a deep understanding of organizational dynamics.

Today, we are speaking with Iker Zubia Vazquez, Global CHRO/CPO in several multinational companies (MNCs) and private equity companies. Iker shares with Margaret Jaouadi his extensive insights on the multifaceted challenges and strategies of succession planning, drawing from his rich experience across various industries to highlight how organizations can ensure seamless transitions and maintain leadership continuity at the highest levels. Join us as Iker delves into the intricacies of preparing for leadership transitions, nurturing potential within the organization, and fostering a culture that supports sustained success.

Special thanks go to Sahar Akhtar, Head of Sector, Industrials EMEA at Pacific International Executive Search, for introducing Iker to Margaret Jaouadi.

Margaret Jaouadi
Can you tell us briefly about your career journey?

Iker Zubia Vazquez
I have 25 years of experience under my belt. As a personal preference, I’ve always maintained an international profile. Over the years, I have lived in six different countries and began assuming international responsibilities quite early on, in my late 20s, initially focusing on various regions across Europe.

I’ve also held several director-level positions with my first director role dating back about 20 years. Consequently, I’m no longer the new kid on the block. My career has spanned various industries, from consumer goods to heavy industry and everything in between. This includes different areas of engineering technology—electronics, and software as a service, among others—which I didn’t pursue further. However, these experiences have contributed to a well-rounded profile. It’s not just about having specific skills or specializations; it’s also about the diverse business environments and dynamic challenges you face, which equip you with varied tools.

From there, my career has been quite eclectic. I’ve tackled everything from the more mundane aspects of HR to the significantly more engaging discussions about talent strategy and developing future leaders within organizations—topics we are focusing on today. While I may not be a supreme expert in any one field, I have managed a broad range of responsibilities across various industries and geographical locations.

Today, I’m here to share some of those experiences and thoughts with you.

Margaret Jaouadi
Can you describe your transition into senior leadership? Was it a gradual shift, or did you find yourself suddenly thrust into a more demanding role?

Iker Zubia Vazquez
My transition into senior leadership resembled the second scenario you described. I’ll delve deeper into this topic a bit later, but to give you an overview, I’ve been part of several organizations, some faring better than others. Unfortunately, I’ve rarely encountered a truly effective and well-integrated talent strategy that facilitated an ideal transition.

In my experience, the initial step always involves proving oneself by delivering tangible results. What constitutes “good” varies across different businesses, but it starts with achieving something significant. Following that, you need to demonstrate certain personal qualities—ambition, interest, and notably, the courage to break new ground.

I was fortunate that someone recognized my potential and gave me an opportunity. It wasn’t a gradual ascent but more akin to a sudden leap. You climb a rung of the corporate ladder, showcase your capabilities, deliver, and then face the next rung, which can vary in size. Some steps are small and well-planned, almost a natural progression, while others are large and more reactive and require one to get out of their comfort zone.

In my view, and from what I’ve observed in others’ experiences, such career advancements often come as a surprise to many. This has certainly been the case in my career trajectory.

Margaret Jaouadi
Can you provide an overview of different approaches to succession planning that you have experienced in your career?

Iker Zubia Vazquez
Looking at the last three organizations I’ve been involved with in recent years, there’s been a noticeable shift in focus when it comes to succession planning and the value the right talent can bring to the organization. What wasn’t a priority 15 years ago has now moved to the forefront of business agendas. In the early 2000s, succession planning might not have been as deliberate, depending on the industry.

Over the past decade or so, companies have increasingly recognized the importance of succession planning. They’ve realized that failing to prepare can lead to significant risks—risks that ultimately threaten business stability, especially in profit-driven, private organizations like the ones I’ve been part of. In such contexts, aligning succession strategies with the organization’s financial goals and the overall P&L is crucial.

The readiness and investment in succession planning are key, and I’m not just talking about financial investment. Although funding is important, the broader investment in developing a proactive approach is critical. It’s about moving from a reactive state to one that’s more proactive.

Let me use a metaphor to explain this better. Consider how you manage your health. Some people only address health issues when they experience pain—the most reactive approach. Others might opt for regular check-ups, recognizing that problems could exist even without pain, thus adopting a slightly more proactive stance. Then some commit to holistic well-being, addressing physical, social, and mental health comprehensively, regardless of immediate symptoms. This is the most proactive and comprehensive approach.

In my experience, most companies I’ve encountered are in the first two stages. I’ve yet to see an organization that fully embodies this ‘holistic well-being’ approach to succession planning, where the development of the organization and its people is as thorough and forward-thinking as the most comprehensive health plans. Most are transitioning from level one to level two, or at level two, aspiring to progress towards a more holistic level three.

Margaret Jaouadi
How would you describe the role you play in the C-suite and senior-level leadership succession planning process?

Iker Zubia Vazquez
Data analytics plays a crucial role in my approach, particularly when it comes to enhancing our current operational strategies. Historically, I’ve been part of organizations where the approach to succession planning was quite basic—essentially if a position became vacant, we’d either identify a promising internal candidate or look externally. That was the extent of the strategy, or perhaps we followed the typical annual review process.

What I aim to do first is conduct a thorough analysis of our present situation. This involves understanding what investments have been made, and what tools we currently have at our disposal to address the talent agenda—of which succession planning is just one piece of a larger puzzle. It’s important to recognize that succession planning is not the final step but a mid-point in a broader talent management strategy.

Returning to your question, my primary role is to analyze the current state and then align our findings with the business’s needs. This alignment is crucial whether the business is growing, declining, stagnant, or involved in mergers and acquisitions or restructuring. The talent strategy must realistically reflect the business’s current trajectory to be effective.

My responsibility extends to creating a comprehensive proposal—if changes, improvements, or new implementations are needed—and securing the necessary buy-in, which includes everything from financial to non-monetary resources. Following this, I lead the implementation of various tools and training programs. It’s important to emphasize that success isn’t solely dependent on sophisticated software or tools—they are merely vehicles. What’s crucial is the effective training of personnel involved and the subsequent monitoring of results to evaluate the return on investment and overall achievement of our goals within the organization.

Margaret Jaouadi
What are the next steps? How do you advise the strategy going forward?

Iker Zubia Vazquez
In my case, the focus isn’t just on ushering in changes but on crafting the processes themselves. I’ve often been tasked with establishing what the process will look like and determining the tools we’ll use. This approach requires transitioning from a broad to a detailed perspective to clearly define leadership within a particular organization. Essentially, it all starts with a fundamental question for CEOs and other top leaders: What defines an exceptional leader in this organization? Without this clarity, our efforts may seem directionless and ineffective.

We begin by identifying the end goal. Are we aiming to cultivate a new generation of leaders or prepare individuals for higher responsibilities? From there, we establish a matrix that categorizes necessary skills and attributes, ranging from technical competencies to social leadership skills, as well as alignment with the organization’s values and culture. This helps in pinpointing the must-haves versus the nice-to-haves.

The focus then shifts to honing in on these identified areas through both assessment and development, ensuring that our efforts are directed towards cultivating leaders who not only meet but exceed our defined criteria. This targeted approach ensures that every step in the process is purposeful and geared towards achieving specific leadership outcomes.

Margaret Jaouadi
How far into the future do you plan, considering the uncertainties brought about by advancements in AI and other technologies? Given the rapid pace of change and the many unknowns we face, what skills do you think future leaders will need to succeed in such an unpredictable environment? And how do you identify and prepare individuals who can thrive within this ambiguity?

Iker Zubia Vazquez
I often categorize leadership qualities into three broad groups, particularly when my senior leaders emphasize technical skills as the most crucial aspect of a leader’s profile. In such cases, I make it a point to challenge that perspective because focusing solely on technical abilities limits us to short-term objectives, as you mentioned.

From my experience, discussions initially revolved around technical skills. However, ultimately, even those who are initially fixated on technical proficiency come to realize that the more significant attributes for successful leadership lie in social skills, values, and cultural fit. These qualities are not only harder to assess but also more challenging to develop and instill compared to technical skills.

Focusing primarily on technical aspects restricts our vision to the short term. In contrast, emphasizing social skills and alignment with organizational values opens up a pathway to long-term success and adaptability within the organization. This shift in focus is crucial because it addresses the complexities of leadership that extend beyond mere technical competence.

Margaret Jaouadi
You’ve mentioned the importance of technical skills, cultural fit, and certain personality traits in leadership. I’ve recently spoken with several leaders who emphasized the need for qualities like humility, resilience, and empathy—traits that are quintessentially human and challenging to quantify. How do you assess these traits in candidates? Furthermore, how do you develop a talent pipeline that prepares future leaders with these attributes?

Iker Zubia Vazquez
Assessing readiness begins once you have established the processes, tools, and practices internally. This should be an ongoing responsibility for any leader, not something relegated solely to moments when time allows. One fundamental concept for success in this area is recognizing that talent management is not just an HR responsibility. Unfortunately, many organizations still view it as such, treating it as a problem for HR to solve. This mindset is a setup for failure.

In reality, talent management and development should be a top priority for everyone in leadership, not just HR. Achieving this mindset shift is neither easy nor common, but it’s crucial. If you manage this, you can forget about investing in expensive, sophisticated software—that’s already 80% of the success.

I’ve had the privilege to work in environments where leaders actively prioritize talent development. Consider, for instance, a finance director. If you ask them what their highest priority is they respond by stating leading and developing their team, those are the markers of true leadership. Unfortunately, you might find only a small percentage, usually less than 5%, who prioritize developing their team. Most will likely focus first on the technical aspects of their roles, like finance, before eventually acknowledging the importance of their team.

This represents a significant difference in mentality. When leaders place developing the best team as their top responsibility, they naturally equip themselves with the necessary tools to foster this development. Thus, the formalities of software and bureaucratic processes become less critical.

To circle back to your question on how to assess readiness: you assess the readiness of your team every single day, not just during formal evaluations once or twice a year. Those are primarily for compliance and governance, to have something in writing. Real assessment happens in the daily work, in the continuous interaction with your team. This hands-on approach is how you truly gauge and develop readiness among your personnel.

Margaret Jaouadi
What are some common challenges or obstacles you encounter in the succession planning process?

Iker Zubia Vazquez
I’ve already highlighted one crucial point: the recognition within an organization that succession planning is not just a leadership issue—it’s a critical business risk. Many organizations understand this, though I often find myself having to advocate strongly for it. Succession planning isn’t merely about being seen as a good employer; it directly impacts the P&L. For example, if a manager responsible for a region generating €100 million in revenue were to leave suddenly without a prepared successor, the company faces a €100 million risk. Hence, instilling this understanding across all levels of the organization, especially at the top—including the board and non-executive members—is vital, as everything starts from there.

Another aspect, more operational yet equally crucial, concerns communication and managing expectations. This varies significantly with the company’s culture. In some organizations, the approach is more open and unspoken; it’s clear and doesn’t need much discussion. However, in others, it poses a real challenge. The key question is how to handle communication with someone identified as a potential talent or a future successor. Should you inform them of their potential role? If so, when? And how do you manage their expectations regarding promotions or salary increases without causing immediate demands?

These are the conversations happening today, even in 2024, with senior managers who might prefer to keep such information under wraps to avoid setting off premature expectations. These discussions are essential as they shape the strategic approach to succession planning and overall talent management within the company.

Margaret Jaouadi
What is your view?

Iker Zubia Vazquez
Clarity and transparency are essential, but so are managing expectations, which can be quite challenging. It’s one thing to have a conversation; it’s another to effectively manage the expectations that arise from it. This becomes particularly complex when you lead a team. Some managers may desire a team with less ambitious expectations. This is a result of trying to keep daily life firmly within the comfort zone and maintain the status quo. Depending on the business and organization this can be a deadly threat…

In my experience leading extensive teams, I’ve found it more rewarding to manage individuals who are capable and ambitious, even though they might require more attention and resources. These team members often say, “If you’re not investing in me, there are plenty of other opportunities out there.” They are the rising stars, and if you fail to nurture their talents, you risk losing them. This need for more intensive engagement presents a significant challenge for any leader, requiring a delicate balance between fostering ambition and maintaining realistic expectations within the team.

Margaret Jaouadi
How do you ensure transparency and fairness in the process?

Iker Zubia Vazquez
Certainly, the emphasis is often on mindset over process, but in this specific context, having robust processes acts as a critical gatekeeper. Initially, it’s essential to clearly define what leadership looks like within your organization. This includes identifying key competencies, values, traits, and behaviors—elements that need to be well-defined, transparent, and understood across all levels of the organization, both leaders and non-leaders alike.

Next, a methodology for the succession process is crucial. There are countless methodologies available, but the goal should be to keep the process simple yet robust enough to make decisions based on clear data or observable behaviors. Over-complicating the process can detract from its effectiveness, as it should be accessible not just to HR specialists but to all leaders within the organization.

Additionally, incorporating techniques like calibration conversations can enhance the process. In cases where the role is particularly senior or sensitive, bringing in third parties or external experts can help provide an unbiased perspective, although I’m generally not a huge advocate of an extensive battery of tests. While such tests can offer additional insights, they are just one part of a larger toolkit.

Finally, it’s important to acknowledge that while we strive to minimize biases, a completely bias-free decision-making process is unattainable. Every decision, from daily choices to significant business decisions, carries inherent biases. The goal within an organization should be to reduce these biases as much as possible, ensuring that decisions align with the company’s strategic objectives and what has been defined as important leadership qualities. This alignment helps to ensure that the process supports the broader goals of the organization effectively.

Margaret Jaouadi
Can you give me examples of successful succession planning initiatives that you have designed?

Iker Zubia Vazquez
I remember one particularly memorable project where I had the unique opportunity to start from scratch in defining what successful leadership looked like within an organization.

We chose to handle this internally rather than outsourcing to consultants, primarily to avoid external biases. We began with a survey and focus groups, engaging with the top echelons of the organization—around 200 to 250 managers. I asked each of them to identify the most crucial elements and competencies for success in their roles, across varying regions and business units. This approach allowed us to employ diverse terminologies and perspectives.

From these initial steps, we narrowed down our findings through several more layers of filtering to define the top eight competencies. These were distilled further, from objective surveys to focused group discussions across different countries and business sectors, until we honed in on the top four competencies deemed essential for anyone with people management responsibilities—from first-time supervisors to the CEO.

This was a foundational journey for us. Based on these four core competencies, we developed everything related to our talent strategy. This included our talent acquisition approach and the creation of a leadership program specifically tailored to these competencies. We also formalized our succession planning processes, determining which elements to measure and assess when considering promotions, both formal and informal. This included pathways for internal mobility, such as transitions to different departments or international assignments.

This experience was incredibly fulfilling—it beautifully woven together everything from talent attraction to succession planning, creating a comprehensive and coherent strategy that was deeply integrated into the fabric of our organization.

Margaret Jaouadi
One last question: what are your thoughts on internal vs. external candidates?

Iker Zubia Vazquez
In my role, I’ve always championed developing our people and advancing their careers. This not only enhances our organizational capabilities but also positively impacts our employer branding and overall image. However, I’ve observed the potential pitfalls of taking this approach to an extreme. If our policy becomes too rigid, favoring internal candidates almost exclusively—unless they are utterly unqualified—we risk missing out on fresh perspectives, new ideas, and the kind of challenges to the status quo that drive innovation.

I believe in fostering healthy competition between internal and external candidates. While I think it’s important for a company to invest more in developing internal talent, and perhaps even tolerate a slightly larger gap in their current capabilities when considering them for advancement, it’s crucial not to promote people who aren’t ready or suitable just to fill a position internally. Doing so can block potentially valuable external talent that could bring necessary change and vitality to the organization.

Margaret Jaouadi
Thank you, Iker, for this insightful and thoughtful conversation.

For a confidential chat about how Pacific International can assist you with your Talent Acquisitions and Succession Planning challenges, please contact Sahar Akhtar or one of our Executive Search Consultants specializing in your sector.