The lack of a proper CEO succession plan can be
costly: Stock prices drop and shareholder value diminishes.
The cost can even include a loss of market share, falling profits
and organizational strife. To avoid such a scenario, a current CEO
must identify and develop a successor. The board is responsible for
establishing and monitoring this task as part of a CEO's
performance criteria.
Solid succession planning can dramatically increase the
likelihood of a successful leadership transition, yet it isn't
always easy for companies to get started. Here are six steps that
can help jumpstart the process:
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Understand the role — Clearly identify CEO
responsibilities and expectations for how the work will be
performed. This exercise should include expected attitudes and
values, as well as specific behaviors that are desired, according
to William J. Rothwell in his book Effective Succession Planning:
Ensuring Leadership Continuity and Building Talent from
Within. Make
