This quick eight minute video on CEO succession planning was compiled in response to the spike in website traffic we’ve observed this month (March 2020). We know that some Boards are responding to the Covid-19 situation by ensuring they have a strong CEO succession plan in place. The video covers our thoughts on the CEO succession planning process and learning we have picked up from clients. It complements this CEO Succession Planning Template download which is also on our site.
The Importance of CEO Succession Planning
CEO succession is a key role of the Board of Directors. Having a plan helps protect the organization in the event that the CEO leaves.
There are two type of CEO succession. The first is planned. Planned succession occurs when timing of the CEO’s departure is known. The second is unplanned succession. Unplanned succession occurs when the CEO leaves unexpectedly – the ‘hit by a bus’ scenario that often keeps Boards awake at night.
The Process of CEO Succession Planning
CEO succession planning starts with the understanding what strategies and risks the organization will be encountering over the foreseeable future. This understanding of the organization’s future helps define the type of person required to lead it. From there, specific criteria and successor candidates can be identified and developed. This CEO Succession Planning Template helps Board through the planning process.
Key Learning on the CEO Succession Planning Process
What we’ve learned on succession planning:
- Waiting for a pandemic to begin succession planning is (obviously) risky. The right time to develop a succession plan is when it is not required.
- Succession plans fail because a) they’re not formalized and b) Boards don’t follow up on them. To be ready for CEO succession, the process must be reviewed by the Board at minimum once/year.
- Succession planning should also include the senior leadership team.
How Boardroom Metrics Helps with Succession Planning
We provide free access to tools and content so that clients can do their own planning. In addition we consult with Boards and CEO’s on the process. We often hear that simply being able to talk with someone through the process is them most valuable assistance we can provide.