GE had a slug fest between three candidates before they chose Jeffrey Immelt, Xerox had a clear, transparent strategy before choosing Ursula Burns and HP had to scramble when Mark Hurd stepped down. So what have we learned about CEO succession planning from these Fortune 500 companies? That one thing is for sure – you need to have a succession plan for top management. That is called planning for the future. However, even though the three scenarios above are completely different, they provide us with three things an organization must do to ensure effective succession planning:
- Identify what are the critical roles in the business and ensure that the organization has a plan for those roles (who will take over, when, who is involved and what is the transition plan)
- Be open and transparent in communicating the selection process, the criteria and the time line for those critical roles. Everyone in the company should have advanced notice of when a new leader will be taking over.
- Know the future vision and direction of the company. This will help with the selection process so you can match the leaders' skill set with the direction of customers and the business.
It is important to remember that these lessons apply to any business, not just the ones we read about in the newspaper.