Not having a succession plan is risky, and 92% of organizations recognize the plight of foregoing one. Despite the proven success of succession plans at leading Fortune 500 companies, such as McDonalds and LL Bean, a recent study by The Rock Center for Corporate Governance at Stanford University and The Institute of Executive Development (IED) revealed that only 46% of respondents have a formal process for developing successor candidates for key executive positions. Meanwhile, statistics show that 40% of CEOs fail within their first 18 months. Like the NFL draft, companies swarm to grab outside candidates. They hardly stop to notice or nurture potential within their ranks. Or in many cases, organizations have failed to implement a successful recruiting structure for employees in the first place which leaves them few internal options. When done correctly, succession planning can help decrease the number of failures and benefit organizations in many ways.
Benefits of Succession Planning
- Avoids chaos during leadership transitions
- Helps individuals realize their goals and aspirations
- Grows stability of the organization’s work culture
- Strengthens skills through a mentorship model
- Positively impacts the bottom-line
- Often improves inter-departmental relationships
As the statics show, succession planning is a sore subject in the business world. Companies are struggling to successfully implement succession plans due to the slow economy, changing technology and ever evolving competition. Below is a Center for Work Life video with some quick tips to help organizations get back on track with succession planning.
Photo Credit: SCA Svenska Cellulosa Aktiebolaget
This Blog has been featured by the West Orange Chamber of Commerce. Sources such as HLN have also been home to publications by Dr. Farnaz Namin-Hedayati and she has been cited by the Orlando Business Journal.
Center for Work Life of Orlando, Florida is an award-winning executive development firm providing leadership and management training to executives and organizations. Our main services include executive coaching, leadership development, executive succession planning, emotional intelligence training, career planning, staff development, and communication in the workplace.