Executive Succession Planning

Less than 15 percent of companies address the need for a leadership succession plan at the top levels of the organization. When major changes strike, such as sudden illness, executive resignation, automobile or plane crashes, earthquakes or terrorism, there is little time for the board of directors to meet and select new top executives. Very few companies have a "bench" qualified to assume command.

Such decisions must be determined before the need arises so that the company can be skillfully guided through the critical periods following extreme circumstances. The goal of executive succession planning is to allow the company to transition as smoothly as possible, using executives developed from within, rather than having to seek outside management help. There are many benefits to effective succession planning. Leadership selection is key to corporate success. Without an ongoing effort to prepare for changes at the executive level, companies are putting their organizational stability and long-term growth potential at risk.

Different kinds of crises require different kinds of responses. A good management development/succession plan encompasses any potential disruptive occurrences. Most companies have not identified response teams able to react quickly to specific situations. A natural augmentation to the executive succession plan would implement the development of such teams.

The organization‘s board of directors drives the processes for initiating and devising management development, succession planning and crisis management. Each program supports the others. If a key officer at the top is replaced, either through attrition, incompetence or disaster, a domino effect ripples down through the company‘s organizational structure. Ideally, executives at all levels will have been groomed to assume key positions in a crisis and the organization‘s transition is seamless.

Building an effective succession plan takes excellent planning as well as committed execution. Two major steps in building a succession plan are:

• Align the plan with corporate strategy. Good and bad leaders alike flounder when their performances are at odds with both corporate strategy and corporate culture.
• Develop competency profiles for each critical management position. Key competencies for each management position serve as a roadmap for building successful individuals for each job and this helps build the organization as a whole.

No one group can define all traits for a company, department, or individual. Successful companies seek a mixture of opinions from past and current position holders, divisional and corporate human resources personnel, management and outside resources. Companies that align succession planning with corporate strategies and build workable profiles for each management job set themselves up for successful transitions.