Succession planning: where to start and why most leaders avoid it

Executive overview

Most leaders avoid succession planning not because they lack time, but because they don't want to make hard decisions about people. The stakes extend beyond the leader — an unprepared organization puts employees and their families at risk.

Start by defining where the organization needs to be in three to five years, then assess who can lead it there. The gap between current capability and future need is what drives the development plan.

The number one role of any leader is to identify and prepare their successor — failing to do so is failing as a leader.

Common myths that block action

• Leaders claim the business is too small, or they own it so they can do what they want
• The real blocker is avoiding hard decisions about people — especially in family businesses
• Oldest-child assumptions replace objective evaluation of who can lead the future organization
• Succession planning is treated as retirement planning; in reality it covers unexpected incapacity too
• A 50-year-old IT firm owner had a stroke — his wife inherited leadership with no plan, no interest, and no preparation

The five key principles

• Investment of time and money is required; target ~10% of a successor's base salary annually
• Jack Welch spent 50% of his time on leadership development — the model for what serious commitment looks like
• Leadership development is multifaceted — in-house programs, external programs (e.g. Center for Creative Leadership), mentoring, and experiential learning all have a role
• One-on-one coaching produces the most transformational impact for most individuals
• Build backup plans: aim for three identified candidates per key role; one departure or character issue shouldn't collapse the plan

Starting the process

• Define the future state first: what markets, products, and distribution channels will the organization operate in three to five years from now?
• Identify the leadership competencies, skills, and behaviors needed at that future point
• Assess current candidates against that future profile — not today's requirements
• If no internal candidate reaches 60–70% readiness, recruit externally rather than wait
• Close the gap deliberately: choose the development method — coaching, CCL, Harvard/Wharton/Stanford executive programs — based on what fits the person and the organization

Letting go

• The outgoing leader must consciously and intentionally move on — not just in title
• Remaining involved sends a signal of low confidence in the successor
• Triangulating relationships with former staff disempowers the new leader
• Practical strategy: build genuine interests and activities for life after the role before the transition happens
• Retirement does not automatically create distance — without something to go to, re-engagement is almost certain

Subordinating ego

• "I built this — nobody can run it like I can" is pride and ego, not insight
• The Marine Corps model: senior officers eat last, making clear that leadership exists to serve the organization
• Leaders must place the organization's continuity above their own legacy or comfort
• Succession planning is ultimately an act of stewardship, not an admission of replaceability