Leadership

Failing Succession Planning 101

By Jessica Stillman

Updated on: August 20, 2008 / 12:27 PM EDT / MoneyWatch

The Find: Two thirds of firms recently reported not being immediately prepared to fill a vacancy at the top of their organization, though the very biggest companies seem more prepared than the rest.
The Source: A recent survey from the Institute of Corporate Productivity.

The Takeaway: One assumes that almost all companies understand that their chief executive is a pretty important guy (or gal), and that not having one (or not having a good one) would be a very bad thing. Yet somehow this sense of a CEO's value isn't translating into a healthy concern for what might happen should a CEO suddenly depart. When the Institute for Corporate Productivity surveyed 275 organizations of different sizes, two thirds admitted to not being immediately prepared to fill a suddenly vacated leadership position. Well that's OK, you think, they'll just hire an interim executive. But no. One third of organizations haven't even identified an interim successor.

The survey did reveal one spark of hope: big companies. Firms with more than 10,000 employees reported being significantly more prepared should top leadership vacate their posts. Here are the cheerier statistics on succession planning at the biggest companies:

66 percent of organizations said they are prepared or very prepared to immediately fill a leadership role,
75 percent have identified an interim CEO successor
86 percent reported having a succession plan in place

Now if only smaller firms would get on the ball and make a plan of some sort for a change at the top.

The Question: If your firm falls in the two-thirds majority without a well thought out succession plan, explain yourself; what's holding you back?

(Image of CEO search jokster by Peter Kaminski, CC 2.0)