Succession planning is anything but a dirty term
While there’s debate over whether it was Benjamin Franklin or Winston Churchill who coined the phrase ‘when you fail to plan, you are planning to fail’, there’s no doubting its soundness – particularly when it comes to CEO succession planning.
Yet mention the words ‘succession planning’ in governance conversations and you’ll be amazed at how many boards – and remember, boards are responsible for finding replacement CEOs – still consider it a ‘dirty’ term, dripping with undertones of dishonesty, sneakiness and behind-the-scenes manoeuvrings.
Reality – backed by empirical research findings – paints an entirely different picture and tells us that those boards and organisations with a succession planning policy invariably enjoy a smooth transition from generation to generation, for the good of the organisation and all associated with it.
Not surprisingly, then, my advice when conducting board development sessions or performance evaluations is always to encourage boards to have a rigorous CEO succession plan – and make sure that it’s built on the worst case scenario.
It’s far better to base your planning on the CEO walking in one morning and saying, out of the blue, ‘I’m resigning…TODAY’ – or getting the news that he or she has fallen under the proverbial bus – than to take the somewhat lackadaisical approach of saying ‘We’re very happy with our CEO and will get to think about a successor when we’re looking to replace him/her.’
Back to Benjamin Franklin – or was it Winston Churchill?
If boards don’t prepare before the event, they’re simply not prepared.
So how do we prepare?
For starters, boards should take measures to familiarise themselves with those occupying the rungs immediately below the CEO. What’s their potential? Can they step into the breach at short notice? And if so, are they media-to-long-term candidates or simply a band aid solution? What about professional development, will it propel those who may be ‘nearly ready’ to the point where they’re equipped for the task ahead?
The best way to answer these questions is for boards, on an annual basis, to review an organisational chart that shows only the CEO and those reporting directly to him or her as this will highlight aspirants with the ability to step into the position – either immediately or in the very near future.
As an aside, it’s a sign of a healthy organisation when you can identify and groom the talent from within and elevate an internal person to the post of CEO. But even when this is not the case, succession planning will, at the very least, tell boards that they need to go outside to find the right candidate.
In such cases, it’s advisable for boards to get the current CEO to identify and share with the board, on an annual basis, two external candidates they believe will fit the bill.
Take these steps and you’re well on your way to being prepared, to nurturing an organisation that is characterised by leadership – and one that’s in good shape today…and can move confidently and seamlessly into a bright tomorrow.
So rather than being ‘dirty’, CEO succession planning enhances your chances of really cleaning up!
Until next time…