How Succession Uncertainty Impacts Performance

There is always a cost associated with uncertainty.

That is especially true when it comes to today’s global organisations and any lack of preparedness and clarity when it comes to management succession.

Few lines of conversation spread across a global business enterprise faster than questions and whispers about who’s going to assume the leader’s role. Add to those unanswered questions about when that’s likely to happen and what it’s going to mean for employees, customers and shareholders, and doubt and worry only spread.
Effective succession planning is an immunisation against such uncertainty.

Every global organisation must not only have an emergency, back-up plan to implement in the event of a crisis involving its leader, but a thorough and purposeful process to rely on as part of its strategic planning.

Today, succession planning touches everything from risk management and corporate strategy to sustainability and talent management. It is in many ways the vertebrae supporting the organisation’s limbs and vital organs, enabling the entire body to go places and achieve things others cannot.

Particularly in times of crisis, there is no replacement – nor any valid excuse – for the absence of a clear, cogent plan to instil confidence in the company’s executive leadership and its governing board of non-executive directors. But lest anyone think of management succession as an episodic, once-every-five-or-10-years kind of exercise, consider all the ways uncertainty about leadership transition impacts organisational performance.

For starters, a lack of clarity about who could and would lead the enterprise if anything ever happened to its current leader may reveal itself in the unexpected departures of high-performing executives for whom succession opportunities were painted better elsewhere.

Those departures could not only trigger others, but also lead other employees to question whey they left, and why the organisation didn’t do more to retain, develop and inform them of its longer-range intentions.

In financial terms, shareholders could be left seriously exposed if public questions about a corporate leader’s transition aren’t answered clearly, resoundingly and quickly. Nothing quite hangs the shareholders out to dry faster than a slow, confusing and/or uncertain succession process following a surprise development involving the leader. In people terms, poor succession preparedness and practice leads employees wondering why they’re not better informed about the organisation’s future plans. Worse yet, they may assume they are purposefully being kept in the dark for some reason, which can impact morale and performance on a wide scale.

The lesson is clear. Management succession represents a unique opportunity to engage others. Seize it.

Copyright © TRANSEARCH International 2015


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