Leadership succession is a delicate process

Why a leadership succession plan is key to any company's future.

Popular culture offers up many examples of the trials and travails of leadership succession – from Vito Corleone naming his youngest son as the new head of the family business in The Godfather, to Alex Ferguson anointing his preferred successor at Manchester United. Leadership succession, in the world of fiction or sport at least, can be a distinctly delicate process.

For businesses too, the subject is often fairly controversial. With alarming regularity, research on the apparent lack of planning for leadership succession across the region prompts intermittent wobbles of concern about how businesses are preparing for the future. The truth is that leadership succession is far from a concern only in the region, with global businesses of all sizes often developing an – at best – hazy plan for what happens after their current leader departs.

At one level, part of this challenge is in understanding exactly what succession planning demands.

To look at examples from the corporate world, an observer could conclude it is essentially a knee-jerk crisis management technique aimed at handling the willing (or otherwise) departure of somebody at the top, followed by a scramble for their replacement.

Perhaps this is slightly unfair, but there are certainly many companies that would benefit from understanding leadership succession as an ongoing process, rather than as an activity they engage in on an as-needed basis.

The reality is that succession planning should be a continuous leadership development effort, aimed at producing a highly skilled and properly qualified cadre of potential leaders within a company. This needs to be focused on a calculation of what is needed to effectively lead the company across its management team, and it must be revisited regularly.

For those responsible for making this assessment, a crucial issue to consider is what the market of the future will look like and what priorities the business will have. Naturally, there is nothing to say that what is needed from the leader right now is what will be needed in days, months and years to come.

There is little point in focusing development solely at, say, the skills needed to firefight in a constricted and challenging market, if what you need in the future is someone who can drive growth through innovative strategy and creative thinking. A future leader might need to be as brilliant as the incumbent, but they may well need to be brilliant in a very different way.

What is needed from an effective succession plan is firstly, that the effort of creating it is not treated as an end result in itself, and secondly, that what is produced is a genuine development process that grows talent but avoids creating unsustainable expectations in those embarked upon it. It is one thing to have a talented group of individuals with the skills needed for leadership, and quite another to have all of this same group convinced they have been groomed as the next chief executive.

Once a firm is that far in its thinking, it must then answer the difficult question of whether recruiting from within or without makes more sense. If a company has a robust process of internal leadership development, the natural place to begin is within their own ranks. Internal candidates are usually viewed as having a deeper understanding of their company, with a greater commitment to its continued success. The downside is the fear they have been developed in the CEO’s image, and will offer more of the same.

By contrast, the external candidate is seen as having less of that history, but also less of an entrenched approach to things. Their selection may be viewed as a statement of intent – someone who can “shake things up” and bring in fresh ideas.

Obviously the answer is to simply search out the best candidate for the role. Having a properly planned and executed succession plan means a company has reserved the ability to choose between qualified internal candidates and the wider market. Succession planning, by its nature, encompasses an element of the unexpected, but by fully engaging with it, a company is better placed to handle a change of leadership.

Ahmad Badr is the chief executive of Abu Dhabi University Knowledge Group.

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