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SHOULD LACK OF SUCCESSION/TRANSITIONING PLANNING BE KEEPING YOU UP AT NIGHT?

According to the 2010 Survey on CEO Succession Planning, conducted this spring by Heidrick & Struggles and Stanford University’s Rock Center for Corporate Governance, more than half of companies today cannot immediately name a successor to their CEO should the need arise. The survey of more than 140 CEOs and board directors of North American public and private companies reveals that, while 69% of respondents think that a CEO successor needs to be “ready now” to step into the shoes of the departing CEO, only 54% are grooming an executive for this position, and more than half could not name a new permanent CEO if the current chief became incapacitated tomorrow. The study also revealed that only 50% of companies have a written document detailing the skills required for the next CEO, and 65% have not asked internal candidates whether they want the CEO job, or, if offered, whether they would accept. (From a Stanford University School of Business press release - May 16, 2010)

 

If this doesn’t strike you as astounding, it should at least be worrisome. And it is only the tip of the iceberg, because an organization of any size has many significant positions for which succession planning and transitioning are critical to business continuity. Stop a few minutes and list them. Whose extraordinary expertise would be missed if they left for whatever reason? The loss of which people would threaten client retention?  Who are the high potentials that can lead the organization in the future?

 

It’s not just the managing partner, CEO, COO and CFO, President or Founder. In one workshop I led, an organization named the chef as a critical position for which succession planning should be done. Who is the glue? Who knows the firm’s most important “stuff,” can influence the decision-makers, is the insightful and diplomatic spokesperson?

 

At a time when circumstances are changing so fast, succession and transitioning planning might be the most important strategic planning your firm needs.

 

Phyllis Weiss Haserot      www.pdcounsel.com

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