What is Succession Planning and Why Does it Matter?
As a key executive in a thriving business or non-profit, you know that your job is vital to the organization. But, have you ever thought about what would happen to your organization if one day the unthinkable happened and you were unable to contribute? Would the organization scramble to fill your shoes? Would chaos ensue? In many companies, there is no plan in place for what to do if a top executive gets sick, changes jobs, or needs to take a sudden leave of absence. Instead, there’s a rush to fill the position, which often results in making poor choices and leaving gaps in work abilities that can impair the company for a long time in the future.
At the bare minimum, every company needs to have a “replacement plan”; this is having somebody in the wings who could step in to fill the top executive’s shoes in case of emergency. This is often called “truck planning”—in very simple terms, if the CEO gets hit by a truck, there’s a qualified executive ready to take his or her place.
As a veteran executive recruiter, I know that finding a C-suite executive with the wisdom, skills, and experience to lead a company is no small feat, and definitely doesn’t happen overnight. Therefore, it’s integral for every company to develop and implement a succession plan. Succession planning is the calm, thoughtful preparation of multiple candidates for any given C-suite role. Succession planning takes the time to rigorously assess current candidates and prepare them months, or better yet, years in advance to become our leaders in the event of either a planned retirement or emergency. McDonald’s chairman, Andrew McKenna has said, “Succession planning is THE number one job of the board.” We all know that succession planning is something that needs to be done, yet research shows that 44% of all companies have no succession plan whatsoever. There is a disconnect between handling the day-to-day operation of an organization and planning for the future.
To get started with succession planning today, begin thinking about what hard and soft skills your replacement needs to have. What experiences on the job have taught you the most? What information do you possess that would leave with you and leave the company hanging if you were unable to pass it on? Identify a few people—most organizations with a strong succession plan identify three individuals—who have the skills to become the next Executive Director, Chief Executive Officer, President, or Chief Operating Officer. Make a list of these individuals as the first step in your succession plan.
My next blog post will speak more specifically about what work goes into developing a workable succession plan.