Succession, are you ready?

Most organisations think they have a succession plan. Most are wrong. A diagnostic for leadership teams who want to know if their plan will actually work.

Every year that succession planning is delayed, you’re gambling your company’s future on hope and luck—while competitors quietly prepare to seize your customers, your talent, and your market position.

The only certainty we have in life is that none of us will be around forever. And the same is true for our professional lives. There will come a day when others take over. But planning for our own succession often proves to be messy time and time again.

Key takeaways

• Start the succession conversation as soon as a new CEO steps in, because waiting until it’s urgent creates unnecessary pressure and puts your company’s value at risk.
• Review and discuss your pool of potential successors at least twice a year, using a structured approach to identify gaps, assign stretch projects, and consider both internal and external candidates.
• As CEO, take personal ownership of the succession process, but ensure your CHRO leads the execution and your board provides oversight to keep accountability and alignment strong.

Cautionary tales

Just look at some of the examples of succession. And these are just a couple of high visibility ones, from recently and some time ago:

The German elections of 2021 and the succession of Angela Merkel.

The chaotic situation after the sudden death of Sergio Marchionne, CEO of FIAT a couple of years ago.

The succession of Bill Gates by Steve Ballmer.

So, what happens? Succession often is not very well planned or, if it is, it’s discussed too late. If you only start this process when it’s urgent, there’s way too much pressure on the process. The result is that there are no successors groomed. Or it becomes a decision that needs to be made in a hurry. And this puts the company at risk. One that can and will destroy a lot of value: in goodwill lost, customers lost, regretted losses and in the end, hard cash.

If you only start this process when it's urgent, there's way too much pressure on the process.

Starting the process early

Here are some suggestions to start a thoughtful succession process, for yourself, your team or for the company you’re supervising:

Start the succession discussion very early. As soon as the new CEO starts is good time to start already preparing the next CEO.

Discuss potential successors at least twice a year. Do it in a structured way. Identify the gaps. Where do we need to invest? What special projects can we give to this potential new leader? How can we ‘test’ her? Would she be potentially interested? Also discuss external options.

We advise the CEO to take ownership of this process and recommend it be delegated to her CHRO and supervised by the board.

Look into the mirror. Embrace the opportunity to be a role model regarding how to lead succession properly! Check your own ego. Think about your legacy. Make peace with things that you cannot change. Think about your own future. Not only high level and in vague terms. Make it tangible, use timelines. Discuss it at home with your partner and craft a real plan.

Process meets psychology

Be aware: succession is not only a process. Of course, you need a decent step-by-step approach. And of course, potential successors need to be reviewed regularly and all of that.

But, succession is very personal too! It involves real people and their emotions. So, to move forward with succession planning, there must be room to address the emotions of the people that are most affected by it: the people that are potential successors and the executives transitioning out someday.

Create room for the process and for the psychology of succession and you will give yourself a good starting point.

Over to you.