Succession planning examples and best practices

As CEO turnovers continue to hit record highs, most organizations can expect to deal with leadership changes.

A leadership exit can disrupt any organization – from stock prices taking roller-coaster rides to employees feeling unnerved about ongoing changes. Fortunately, a solid succession plan can turn any exit into a smooth, well-managed transition.

In this post, we’ll provide best practices to keep in mind for succession planning and share examples of successful leadership transitions.

Top 3 best practices for developing a succession plan

A seamless leadership transition doesn’t happen overnight. That’s why a key part of succession planning is being able to think ahead at least three to five years. Here are four best practices to help you stay ahead of the curve.

1. Cultivate a pipeline of talent early

Building a high-quality talent pipeline is a challenging and time-consuming process. In fact, 74% of public and 52% of private companies reported that maintaining a robust talent pipeline is the most difficult aspect of CEO succession planning.

Unfortunately, the pipeline is something that many HR teams tend to neglect. 40% of companies report not having a single internal candidate to replace the CEO should he or she exit the position. This puts the company in a vulnerable position and will ultimately cost the company in several ways, from paying for executive search costs to seeing turnover amongst high-potential employees (HiPos) who feel overlooked for leadership positions.

That’s why, even though you might not have any open positions now, it’s important to start cultivating that pipeline today. This means accurately identifying who your HiPos are and making sure you’re constantly adding new candidates into the mix.