Spencer Stuart: Four New Rules for CEO Succession Planning
CEO succession has always been one of most critical and high-stakes responsibilities of a board. A failed process can result in an unaligned board, a lack of ready talent and, ultimately, a value-destroying CEO transition. Layering onto an already challenging dynamic, several key forces are converging to make the CEO role more complex than ever — with implications for both the attributes of future CEOs and how boards should approach CEO succession today: The external forces affecting business are more dynamic than ever, CEOs now answer to more stakeholders & Stakeholders demand accountability for diversity, not just promises.
Best-in-class CEO succession planning will evolve to reflect these realities — accommodating a wider range of possible future scenarios and ensuring boards have more options to select from when a CEO transition is imminent. To do this, boards and CEOs will have to start succession planning even earlier to increase the chances the right person will be ready for whatever scenario the company faces. Spencer Stuart explained boards that do this well will follow the four new rules of succession planning:
Take a multidimensional view when scenario planning
Increase succession options
Evaluate and accelerate potential, don’t just rely on proven experience
Think beyond CEO succession to CEO-plus