The Importance Of Succession Planning

Getting real about supporting leaders in times of change

Due to the increase in turbulence and uncertainty in today’s market, there seems a greater requirement than ever before for strong, stable leadership.

This emphasis on the CEO replacement strategy was manifest in 2009 with the US Security and Exchange Commission removing the right for companies to avoid disclosing their CEO succession process to shareholders. The result has been an avalanche in the media of close reporting on the likes of Warren Buffet and his leadership exit strategy from the Berkshire Hathaway which makes headlines every time there is a shareholders meeting.

Succession plans need to be visible if they are to create credible and respected. As a guide, the company mission statement and business objectives need to be clarified. The current leaders must also supervise the continuing success of the enterprise and ensure their successors understand and are capable of executing business objectives and achieving the company vision. In this sense, Succession Planning is the learning tool used by the incumbents to train and direct their successors.

On a basic level, the succession plan also safeguards against unlawful discrimination. The current leaders avoid preferential treatment in the succession planning stages if they are seen to use the mission statement and company objectives as their guide to selecting potential successors.

The importance of the Exit strategy. This often more often than we would like leaders to a reaction of confusion. However our aim in asking is to seamlessly design the right skill-sets and cultural fit in the role we are recruiting for, not just for the present need but the future. It is also an acknowledgment of the incumbent leader’s responsibility to think of their replacement.

Finally, agreement at all levels that a leadership succession plan is good business practice is paramount to its success.

With organisations facing increasing complexity and uncertainty in their operating environments and in markets that are increasingly unpredictable leaders need to have clarity so they can find creative ways to navigate problems, balance the needs of the company with social responsibility and hold on to uncertainty while realising the optimum time to make a decision.

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