The Importance of Thoughtful Succession Planning

The political and personal drama that recently played out on a national stage—should President Biden run for office again or retire?—to me brought to mind one of the most important but frequently neglected issues in business management: succession planning.

Companies often have succession plans on the books, but don't execute them.

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While politics is, of course, a far different arena from the business world, the fundamental succession question remains the same: When should a leader step down and make room for new talent to move into the role?

My focus here is not to try to pinpoint exactly when such succession should occur (individual circumstances vary greatly depending on a wide variety of factors) but to discuss key issues surrounding succession planning.

Clear Plan Needed

As the situation with President Biden amply demonstrated, such decisions are deeply personal, fraught with emotional complexity, and often damnably hard to make.

Well-managed organizations should have a clear succession plan for key executives. Not just for the CEO but also for other individuals filling critical roles. Bench strength matters. If an organization were to be seriously competitively disadvantaged by a certain individual leaving and the position becoming empty, that role should have in place a solid, ready-to-be-executed succession plan.

If this sounds like basic business common sense (and to me it definitely does), the reality is most organizations don't handle it well. There's a wealth of data out there examining this problem.

Research has shown that only around half of major companies have written succession plans.

Another study indicates that while 86 percent of business leaders recognize succession planning is important, only 14 percent feel their organization is performing the function well.

These numbers seem entirely reasonable to me. The emotional nature of finally deciding to leave a high-level job one has likely aspired to for many years makes executing these plans harder in practice than in theory.

"Only I Can Do This Job"

Ego as we well know is a potent, unpredictable force to reckon with. And many individuals in positions of power are fueled by high-octane egos.

As the recent example involving President Biden and Vice President Harris showed, stepping down and being replaced can be a delicate dance requiring careful choreographing.

While this was an unusually consequential public circumstance, a similar dynamic (will the old make way for the new?) plays out regularly in organizations everywhere.

In many ways, succession plans are about risk management. The risk to an organization of losing talent and intellectual capital. The risk of not being sure whether old talent is still at the top of its game and new talent is ready.

The reality is, longtime leaders often are loath to leave. They fear for their organizations and perhaps themselves; they understandably dislike the loss of power. Only I can do this job. In the political arena at different times, we've heard this exact sentiment from both Presidents Biden and Trump, and over the years I've heard it from business leaders as well.

Only I can do this job.

In my experience, what I've observed is that this common conceit is virtually never accurate.