“A person who does not worry
about the future will shortly start to worry about the present” is an ancient
Chinese proverb.
Unfortunately, still rare
occurrence is leadership succession which is and should be too important to
ignore.
A company CEO is irrevocably
gone. Who will take his position? Or, the top executive is attracted by your
competition. Is there anyone new ready to fill the role? What would you do: you
may end up with an empty C-suite or, even worse, get an under qualified person
to fill the job because simply there is no one better to take it over.
Transition period in the top
management position may present quite hazardous times for companies. If the
previous CEO has had significant and sound results a worry about his
successor’s ability to maintain the same momentum will inevitably arise. To
avoid a future crisis in leadership succession there should be developed and
implemented plan for leadership succession beforehand. This should cover planned
process of leadership transition but also the unplanned ones. Important
functions will thusly in large amount continue uninterrupted.
Increasingly large and
globally integrated companies take leadership development and CEO succession
extremely seriously. In one study of more than 200 CEO successions the
researchers found out that in contender succession turnover among senior
executives has a positive effect on a company’s profitability but in an outsider
succession it has a negative impact. So, companies face two ways to fill the
empty position: with internal process of development of a specific candidate or
hire externally and choose the best free one on the market.