Identify your successor – that is one job that all leaders should be focusing on. Leaders at all levels within an organisation are responsible for ensuring that the workforce has the skills and capabilities required to achieve success in both the short and long term. Given this key responsibility, I am still surprised at how few companies implement a formal succession plan for their key leaders, including their CEO – the primary individual responsible for the success or failure of the company.
In theory, the current CEO has the greatest understanding and appreciation of what it takes for their organisation to succeed. Therefore they are ideally positioned to play a key role in preparing and developing potential successors to lead their business into the future. The lack of an appropriate succession plan can have a negative impact on the business’s future success.
I would take this practice a step further and endorse a succession plan that looks to develop the leaders at every level within an organisation. If a CEO can effectively groom future candidates for their role, it will organically nurture a culture of leadership development through the various levels of the structure. Ongoing leadership development is critical for any organisation to achieve and maintain sustainable, long-term success.
In this article from McKinsey & Company there are other factors that leaders need to be aware of when developing a succession plan. Firstly, consider the organisations future strategic direction. Your candidate-selection criteria should align with the organisations future aspirations. Secondly, you need to have a flexible plan that can be adjusted to suit the market and competitive situation at the time of succession. And finally, you need to be aware of the role conscious or unconscious bias, and how it can impact a candidate’s suitability as a successor. All three of these considerations should also be top of mind when developing a forward-looking succession plan for your organisation.
Considering one in three CEO successions fail, why don’t you try put the odds back in your favour by starting to develop a formal succession strategy today.