Every year, 10 to 15 percent of organizations have to go through the process of obtaining and training a new CEO, due to retirement, dismissal, illness, or any other unexpected reason. Despite the number of companies going through this process each year, only 54 percent of companies surveyed are actually grooming a possible successor, and 39 percent of organizations have no viable candidates readily available.
When it comes to inside vs. outside hires, 20 to 30 percent of organizations surveyed choose an outside hire over someone inside the company. Whether inside promotion or outside hire, the desirable traits in a new CEO are the same. A recent study of 32 managing departments found that soft skills such as team building and resilience outweighed characteristics such as track record and industry experience.
There are several aspects to consider when developing and eventually implementing a succession plan. The main fundamentals include:
- Hiring from within or bringing in someone new
- Factoring diversity into decision making
- Making sure you have support from HR leaders
- Focusing on everyone or just high potentials
Prepare a succession plan so the organization is ready when the time comes. Being proactive rather than reactive is healthier for the organization as a whole.