SA executive search firm, Jack Hammer Executive Headhunters, has analysed data from a poll conducted with leading firms in the financial services, FMCG and engineering sectors. While about half confirm that a clear succession plan is in place and the successor identified, others indicate that leadership teams have been "fragile" and lacking in depth for the "past few years" and only some departments have a plan, while others are rudderless.
Debbie Goodman-Bhyat, the MD of Jack Hammer and an expert in long-term, strategic succession planning, says it is critical for corporates to have a plan in place to make any transition in leadership as smooth as possible: "Although most top executives have relatively long notice periods in their contracts so that they can hand over the reins seamlessly, the time it takes to source the right executive for the role is often under-estimated. Further, just as the current incumbent may have a three- to six-month notice period in place, so too will the new appointee.
"Further, while there may be several potential candidates working at competitor organisations with the skills and experience to step into the parting leader's shoes, the key factor in a successful leadership transition is 'fit'. This three letter word encapsulates all of the less tangible but absolutely critical issues such as culture, values, EQ, etcetera," notes Goodman-Bhyat.
"An organisation takes its cues from the head. Get the successor wrong, and you risk upsetting shareholders and disenchanting staff, as well as costing the company a pricy severance package. A leadership 'wobble' could echo through the company for years down the line," says Goodman-Bhyat.
She points out that the best successor is not necessarily the current second-in-command: "Some people are excellent in support positions and leaders need these people. But, just because they're close to the action, it doesn't automatically follow that they will easily and comfortably step into the CEO's shoes.
"Modern succession planning needs to be strategic rather than sentimental. And if the decision to appoint an external successor is going to result in the noses of potential internal candidates being out of joint, or even their departure from the organisation, this should not stall bold decision-making regarding the right leader."
Goodman-Bhyat says companies have to weigh up transparency - where everyone, including rivals, knows the succession line - against strategy, where staff are buoyed and competitors awed by the new arrival of a new broom. "One cannot under-estimate the impact of the appointment of a respected and admired professional to a key role in an organisation - an individual with top credentials and a reputation of achievement will not only have a positive impact on the current staff complement, but will also be able to attract talented executives from other organisations who are keen to be part of a winning team."
Frequently, when a new leader is appointed, there is an automatic executive shuffle. She suggests that new leaders carefully consider what approach they will take when it comes to their supporting team.
"If the company is in the doldrums and you've been brought in to shake things up, then best you be bold and do so, after doing due diligence, of course. But, if the firm is stable and you're taking over from a successful and well-liked MD, drastic and immediate changes could upset staff and customers. You tread a fine line between revolutionising the status quo and maintaining it."
