The CEO holds the most visible role in the organization and must have a succession plan. Senior leaders and the board of directors should ensure that the vision and business strategy for the company are defined (Workforce, 2013). An agreement on the vision and strategy will help clarify and identify future organizational needs. It is critical that the competencies needed for the CEO role are identified to inform the candidate search and development.
Are the competencies identified for the CEO available in any of the organization’s current employees? Look at the data from the organization and conduct a gap analysis (USOPM, 2005). The team needs to put a plan in place to identify internal candidates with leadership qualities. Identifying these high potential performers is an important part of growing the potential candidate pool. Retention policies need to be effective in keeping high-potential employees so that there is not loss through turnover.
Often, it is best if the successor comes from within the organization. Miles (2009) writes that of the top 1,000 companies by revenue in 2008 only 55% of newly appointed CEOs came from inside the organization. Goldsmith (2009) states that “external CEOs come with extremely high risk.” An internal candidate comes with an understanding of the company culture, vision, and strategy. The process of promoting from within signals to employees that the organization values hard work and success. The succession team needs to carefully decide how and when to notify the successor and the other candidates once they make the decision. Goldsmith (2009) indicates the team should tell the successor as soon as possible, so they do not become frustrated and leave the organization.
References
Workforce (2013, March 11). Succession planning roadmap. Retrieved from http://www.workforce.com /2013/03/11 /succession-planning-roadmap/
The United States Office of Personnel Management. (2005). Succession Planning Process. Washington DC: Author.
Miles, S.A. (2009). Succession planning: How everyone does it wrong. Forbes. Retrieved from http://www.forbes.com/2009/07/30/succession-planning-failures-leadership-governance-ceos.html
Goldsmith, M. (2009). Succession: Are You Ready? Boston, MA: Harvard Business School Press Books.