Ford Motor Company, for example, has been grooming Alan Mulally’s successor, Mark Fields, for more than a year (Mulally will step down as CEO of the firm before year-end). Fields, COO, runs a weekly review meeting, and holds a regular Wednesday morning meeting with key executives, according to The Wall Street Journal.
Once a decision has been made, researchers from the Corporate Governance Research Initiative (Stanford Graduate School of Business) and The Miles Group say that the switch should not be drawn out. The longer the succession period from one CEO to the next, they say, the worse the company will perform against its peers. Yet, nearly 40 percent of companies they researched say they do not have an internal succession plan in place.
While the decision ultimately belongs to the board, many chiefs want to ensure their initiatives continue on after they’re gone, and feel it is their responsibility, or right, to choose a successor who will carry on their work. Jim Skinner, former CEO of McDonald’s, mentored his replacement for seven years before he retired, according to Workforce.com.
By the time a succession plan is needed, however, these experts say it’s generally too late to start creating one. That’s why Russell Reynolds Associates suggests boards not only have a written succession plan, but also conduct “regular, in-depth interviews” twice a year.
The initial board process they recommend would look like this:
When implementing a succession plan, The Rawls Group suggests that companies look not simply for the best and brightest, as that is not an absolute guarantee of a good fit or of success. Instead, look at characteristics such as persistence, determination, average intelligence and a focus on outcomes.
“When you’re looking at the succession pool, look for people who have proven they can master a body of knowledge and apply that knowledge to real-world situations and produce results,” says succession strategist Dan Schneider, from the Rawls Group.
When thinking through your succession plan, look for someone with the skills your company will need five to 10 years down the road, rather than today. These include digital media, collaboration and even multiple languages.
Additional Reading:
A Practical Guide to CEO Succession Planning
Point of View 2014: Deeper on Digital (Spencer Stuart)
The Seven Myths of CEO Succession
Tick Tock, the Boss is on the Clock
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
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2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
