Strong leadership is key to the success of a company, yet most companies do not have an actionable succession planning process in place to replace departing CEOs or key C-Suite executives. The solution: to craft succession plans closely tied to coaching and internal talent development.
No one would deny the importance of strong, capable leaders at the helm of a company. Successfully managing the transition from a departing leader to a new CEO or C-suite executive ready to step into the position is thus one of the most important functions of a board of directors. But the responsibility of such a task does not lie solely with the board of directors. Effective succession planning begins with effective talent management — developing the great leaders of tomorrow rising through the company. The succession plan must always be ready to launch: a company can ill-afford to be taken by surprise by a CEO or key executive who is, for whatever reason, suddenly departing.
Surprisingly, a large number of companies have neither effective succession planning processes in place, nor the talent development programs that should be underpinning such processes. The reason, as revealed by a Stanford survey of executives and directors at 20 companies, is that many company leaders underestimate the importance of a succession planning strategy — and what their organizations need to be doing today to fill the executive-level voids that inevitably need filling sooner or later.
The findings of the survey, conducted by the Institute of Executive Development and Stanford University’s Rock Center for Corporate Governance, included the following:
What can executives and directors do to be proactive in developing an effective succession planning program? Here’s a seven-step plan:
Learn from the best practices of others. Succession planning is a universal concern in business. Companies should take the opportunity to learn what others are doing, and integrate the practices that apply best to their situation.
2013 Report on Senior Executive Succession Planning and Talent Development. David F. Larcker & Scott Saslow (March 2014).
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