We’ve written ad nauseam, it seems, on the dire importance of fixing the business community’s subpar succession-planning systems, especially CEO and C-Suite succession.
Just Thursday, Editor Dave Shadovitz filed this report from the i4cp conference in Scottsdale, Ariz., on some valuable lessons learned about succession at Xerox, including the key role HR had — and has — to play. And just a few months ago, our January/February cover story, “Building a Better Pipeline,” suggested business leaders are truly starting to get the importance of planning ahead for top vacancies and are paying closer attention to the problem.
Unfortunately, at least according to two releases that came across my desk earlier this month, “starting” to get it appears to be happening with a great big capital “S.”
This March 6 report from Stanford Graduate School of Business faculty member and researcher David Larcker finds only 46 percent of executives and directors at 20 companies polled have a formal process for developing successor candidates for key executive positions.
“The corporate leaders we interviewed all believe that succession planning is vitally important, but the majority do not think that their organizations are doing enough to prepare for eventual changes in leadership,” says Larcker, “nor are they confident that they have the right practices in place to be sure of identifying the best leaders for tomorrow.”
Then there’s this bad news released a day before from IIC Partners. According to its survey of 1,270 business leaders from around the world, 80 percent of senior executives say their company would need up to a year to replace them if they left. And this despite the fact that almost six in 10 say their company has a succession plan in place!
As Paul Dinte, chairman of IIC Partners, puts it: “It is one thing to have a written succession plan, but quite another to be prepared for the departure of a C-level executive.”
No matter the location or the industry, he says, “there remains a gap in succession planning by many organizations, [an oversight that] will likely be worsened with the continued exodus of baby boomers from the workplace.”
If there’s any good news from the latest research, perhaps it’s in this report from Challenger, Gray & Christmas indicating that CEO turnover appears to be falling. The story in the above link, which appeared in the Central Valley Business Times, says turnover among U.S.-based CEOs declined 14.5 percent in February, as 112 CEOs left their positions during the month as opposed to 131 CEO departures in January.
While the numbers aren’t earth-shattering, at least there appears to be fewer top posts opening up to provide nightmares to those employers, and their HR leaders, with inadequate succession systems in place.