For many companies, executive succession planning remains on the back burner.
In 2013, the Institute of Executive Development and Stanford University's Rock Center for Corporate Governance conducted in-depth interviews with executives and directors at 20 companies regarding their succession and executive development practices. Their findings showed that less than half of the respondents have a formal process for developing successor candidates for senior executive positions. Only one-fourth of respondents believed that there was an adequate pool of successor candidates for the CEO position at their companies.
The findings also indicate that the roles in the succession planning process are not well-defined. Additionally, the researchers found that succession plans are not connected with coaching and internal talent development programs, resulting in a lack of integrated leadership development within organizations.
The study emphasizes the need to implement succession planning as a continual practice, which keeps the management team and the board of an organization prepared for a transition at any time. It also proposes evaluating executives in terms of their potential to succeed at different and higher roles within their organizations.
Additionally, the study mentions the value of learning from the best practices of other organizations and adapting such solutions and structures for their own frameworks and situations. The researchers also discussed the benefit of assigning roles and responsibilities of succession planning to board members and senior management, and holding them accountable for measurable results.
An inadequate succession planning process can result in heavy losses to an organization if it experiences a sudden change in leadership—losses that may easily have been avoidable.