CEO Succession

CEO Succession Planning: Crucial and Totally Overlooked

It is crucial for chief executives to plan for their departure wisely – and plan early.  Although it sounds difficult to look to the future while still focusing on the present, a smooth transition is a key to company success.  A well-executed transition can highlight the skill and savvy of a management team, but a poorly-executed transition will be beyond detrimental to company reputation.  CEO succession can have an impact on the company’s strategic momentum, morale, reputation, and stock price.

Stephen Miles writes for BusinessWeek about the pitfalls of CEO succession planning, something that most companies fail to do efficiently and effectively.  Miles sees five main reasons that this process gets placed on the back burner when in reality it should be front and center.

  1. 1. CEO Succession Is a Rare Event – because of the rarity of this event, no one is practiced in the process and protocol
  2. 2. The Process Never Ends – the board always thinks they can look at this issue tomorrow, and in addressing CEO succession the board may be afraid to offend the current CEO
  3. 3. Focus on the Past – it is easy to look at past leaders to see what worked and what didn’t work, but past successes (and leadership traits) may not be what will bring success to the company in the future
  4. 4. The CYA Era – boards create a succession plan to say that they have one, but fail to iron out the details or get a full consensus
  5. 5. It Becomes the CEO’s Job – the board asks the CEO to take choose their successor and that leads to the possibility of bias; the board is better suited to make a choice about the direction of the company

Read: Why So Many Companies Fail at CEO Succession Planning


Chief Executive

Chief Executive magazine (published since 1977) is the definitive source that CEOs turn to for insight and ideas that help increase their effectiveness and grow their business. Chief Executive Group also produces e-newsletters and online content at chiefexecutive.net and manages Chief Executive Network and other executive peer groups, as well as conferences and roundtables that enable top corporate officers to discuss key subjects and share their experiences within a community of peers. Chief Executive facilitates the annual “CEO of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of peers, and is known throughout the U.S. and elsewhere for its annual ranking of Best & Worst States for Business. Visit www.chiefexecutive.net for more information.

Share
Published by
Chief Executive

Recent Posts

A CEO State Of Mind—In County Government

Why companies like Nokia are betting on Middlesex County, New Jersey—where smart governance meets private-sector…

2 days ago

How Kardex Remstar Is Working To Build American Automation

The warehouse automation equipment maker is investing in a strong supply chain by building production…

2 days ago

Six Questions To Bring Insight Back To Strategy

Strategy processes are getting squeezed. Answering these questions will set you up for building and…

2 days ago

Reliable AI Agents

The key lies in a progressive implementation of control mechanisms, each adding a new layer…

2 days ago

CEOs Of The Year On Succeeding In The Top Job

To celebrate the 40th CEO of the Year, we share some lessons learned along the…

2 days ago

‘A Good Time To Speak Up For Business’: The 2025 CEO Of The Year Celebration

Chief Executive Group CEO Marshall Cooper opens the 40th annual celebration, this year honoring Lilly’s…

3 days ago