Situation: A CEO, planning for his future, wants to create a succession plan. Done correctly, this should also promote the growth of the company until it is time for him to retire. The challenge is that the company is highly decentralized, and a clear successor has yet to be identified. How do you create a succession plan?

Advice from the CEOs:

• Tie succession planning to growth. This will benefit the company whether the CEO’s retirement is in the planning horizon or the more distant future.
  • Consider geographic transfers to provide growth opportunity for key managers and to proliferate the success of highly successful regions into less successful regions.
  • Develop a leadership generation engine. Consider GE as a model for this as noted in Jim Collins’s books Good to Great and its predecessor, Built to Last. GE’s success is a model for building long-lasting value substantially beyond the current value of the company.
  • Create a vision of what the company could be and the organization chart to fulfill this vision. This will guide and support the two points, above.
• As new talent is acquired, conduct this with an eye to growth.
  • As the company identifies and hires top prospects, conduct the hiring process to fill the organization chart of the future company that is envisioned.
  • Look at outside hires for growth positions to complement home grown talent.
  • If business or company acquisitions are being considered, be aware that the leadership of the acquired business or company and its top talent may depart. Include retention clauses and incentives in any acquisition contract.
• This effort must be approached as a long-term development process – it does not happen through quick-fixes but through a commitment to excellence in acquiring and developing talent.

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