How to succeed at succession: in an interview, a consultant talks about approaches companies should and shouldn't take to build their internal capabilities and nurture future leaders--or find outside talent.

• Author: Marshall, Jeffrey
• Position: SUCCESSION - A talk with Passages Consulting LLC's Ron Carucci - Interview

There are no magic formulas to succession, whether it's at the CFO or CEO level or further down in the organization. It's often postponed or given short shrift in smaller companies where managers are so focused on the day-to-day challenges of running the business that the future simply doesn't get addressed. And, in organizations of all sizes, the chronic question of inside vs. outside comes up when key positions need to be filled. Then, the effectiveness of internal training and coaching are very much at issue.

Financial Executive spoke about succession with Ron Carucci, a founding partner of Passages Consulting LLC (www.passagesconsulting.com)--which works with senior company leadership on operational and strategic challenges--and the author of Leadership Divided: What Emerging Leaders Need and What You Might Be Missing (Jossey-Bass, 2006). Carucci, who speaks volubly and in quick bursts, brings a perspective from working with top companies; Passages clients include Starbucks, Medtronic, Con-Agra Foods, McDonald's and Miller Brewing Co. Excerpts from the interview follow:

fe A lot of companies don't seem to do a good job of promoting from within or are constantly bringing in people from the outside, or sense that they need to that. There's the whole question of not having a good leadership pipeline. What are some of the things that they need to think about?

rc First of all, when you think about preparing another generation of leadership, particularly in the finance department, where the skill sets are rapidly changing and the rules for success are constantly shifting--both from a regulatory point of view from outside, as well as a competitive point of view--to keep thinking that you can continually make the "buy versus make" decision is very short-sighted.

You need to start very early on in people's careers to figure out how to help them, but also how are you layering in skills and competencies for tomorrow's generation of finance executives on a consultative, analytical, foresight-creating predictor of performance. [Those aren't] the bean counters that grew into today's CFOs. If you're not thinking about your youngest finance professionals and the kinds of executives they can be groomed into, you're probably mortgaging the future of your finance world.

The thing I probably hear the most from my CFO clients is, "Make all of my controllers mini-CFOs." To not be thinking about that and to be actively engaged in approaches to how to do that is pretty short-sighted.

fe In others words, they're asking for someone with more than just the technical skills they would have as a controller or...