German Portal



 About RMP

About themanager



Put success into succession planning

By Bryan Hattingh *


Succession planning, as it is constituted today, is a hotly debated but generally ignored practice in corporations and businesses.


Most managers fail to think about succession planning until it needs to be implemented. Suddenly there is a void at the top and nobody has been primed to fill it.


Few events have such an impact on a company as the departure of key leaders, in particular the CEO. How that exit is managed not only has lasting impact on the organisation, but it can affect external perceptions of the departing incumbent's effectiveness and delivery.


Management succession should be perceived as a process rather than an event. The view and structure of it should not be confined to matters dealing with the moment at which the reins are handed over to a successor as the outgoing leader retires to the coast and becomes yesterday's hero, or moves on to a bigger or different challenge.


Leaders can leave organisations for many different reasons, ranging from retirement, and pursuit of new challenges, illness, death or decision to relocate to a new geographic region or position.


The obvious starting point for most companies is to identify the key leaders whose departure would impact on the business's stability, delivery capability and, in turn, profitability.


Targeting experienced leaders in other companies with a view to their assuming a key role in the organisation should not be managed in a reactive and time-critical situation.


Succession planning should begin long before the decision or announcement of one of the leaders' departure. It is a system that requires planning, teamwork and ongoing re-evaluation and refinement.


If leadership transition is not managed as a planned process, it will be done reactively, which almost always is inadequate and can create complications.


Risk protection

Often sold as a silver bullet or panacea of corporate risk, key man insurance is advisable for all companies. With this insurance, in the event of a tragedy, loss of life or inability to continue functioning, the organisation will receive a payment that compensates for the direct costs and impact of short to medium-term contingencies.


Unfortunately, there are aspects that cannot be catered for, particularly in the arena of soft skills and ability to lead and inspire people. Key man insurance only covers an organisation in respect of direct financial risk.


Global stock exchanges place high emphasis on depth and breadth of management when valuing companies. Excessive dependence on a particular person or people will result in analysts rating the company poorly.


There are many risks facing companies; one major risk is what is known as CEO survival dependence. This is particularly the case in owner-managed businesses where the CEO performs many tasks and is usually pivotal in the securing of deal flow and ongoing revenue stream.


While strong leadership provides energy, drive, trust, credibility, personality and passion, reliance to the point of survival is risky and unhealthy.


Build from within

A key factor to combating some of the leadership crisis lies in identifying and developing internal talent. Most importantly, it's time for companies to re-engineer and restructure some roles, particularly that of the CEO, in such a way as to reduce dependency. In effect, the CEO must strive to create a business that is self-perpetuating and sustainable without him. In addition, the CEO should not only be planning and developing growth initiatives, but also contingency models in the event of downturn or tragedies.


The question may be asked as to whether the CEO has a major role to play in succession planning. The answer is unequivocally yes, as he has a key part to play in building a culture of coaching and mentorship and upliftment throughout the organisation. His time should be freed up to focus on the company's mobility, competitive advantage and sustainable growth.


In organisations where succession planning is treated as a process, the CEO and other top-level leaders should be able to withdraw from their key roles for short or even medium-term periods in order for the company to develop the capability to operate independently of them. This process requires careful thought, planning and effort, but the payback can be significant.


In the book "Built to Last - successful habits of visionary companies", Jim Collins identify 18 companies that had been at the forefront of their industries for at least 50 years. He found that one of the key reasons behind their success was their history of strong focus on succession and leadership planning, ensuring leadership excellence and continuity. This process involves more than merely finding a deputy or 2IC; instead it is a conscious process of ensuring a seamless handover at a time when the business has the strength to anticipate this type of eventuality.


Organisations must move towards the CEO being dispensable. This brings to mind some lines from the poem "Indispensable Man":


"Take a bucket and fill it with water,

 Put your hand in it right up to the wrist,

 Pull it out and the hole that's remaining

 Is a measure of how you will be missed"


Bill Gates engineered and deployed his dispensability when he withdrew as CEO of Microsoft, replacing himself with Steve Balmer and remaining on as the key visionary behind the business, with Steve in charge of running the day-to-day operations.


The redefined portfolio of the CEO should include the following:

The setting and continuous honing of the corporate vision,

Continually creating value-add,

Building of significant and meaningful long term client relationships,

Speaking knowledgably and confidently on all of the various service and business lines.


The ideal 21st century CEO is a visible and passionate spokesperson for his company and is an expression of the brand.


* Cycan is working on a number of corporate initiatives to design, construct and rollout ground-breaking succession innovation, and will report on the findings in the near future.


* Bryan is CEO of leadership solutions group Cycan. He also hosts the weekly business discussion show Risky Business every Wednesday at 5.30pm on Radio 2000.






Bryan Hattingh, Cycan,, (011) 783-7244

Frank Heydenrych, FHC Strategic Communications,, (011) 608 1228