During recessions like the current one some companies win and others lose. There are a number of reasons why organizations fall behind including:
· Too much debt
· High expenses
· Lack of credit
· Loss of focus on the customer
· Fear to act; lack of decision making
But one area that tends to be overlooked is succession planning. If an organization does not actively focus on succession planning it has an impact during good times and bad. In good times a lack of succession planning can hurt an organization by:
· Failing to plan for industry and/or market shifts
· Losing the intellectual capital needed to stay competitive
· Losing site of the mission or vision needed to be successful
· Creating concern or even panic with in employee ranks about who is in charge, and the health of the organization and its future prospects
During a difficult economy the effects can be heightened because of the extreme circumstances. The impact can quickly spread to a customer base as well. Think about Steve Jobs and the rumors and concerns that surrounded his health. He had to come out and expose his personal health and physical condition in order to stop Apple stock from falling. That is the obvious succession question. But when you have to trim your company quickly…
· How do you know you are trimming the right people?
· How do you know you are keeping the best people?
· Are the people staying the best for the company you were, are, or will be?
We might see this issue as not important because everyone does succession planning. Well the exercise of succession planning turns out to be far less practiced then one might think. According to Executive Decision the majority of companies do not keep up with succession planning. Specifically, here are some statistics:
· Our succession planning is regularly updated 46%
· Our succession planning is done in fits and starts 25%
During times like these, I would hope I work for a company in the 46% rather than the 54%. Where do you think your prospects look better?