It turns out many companies may be woefully unprepared for the departure of senior executives, according to a new survey of 1,270 business leaders by IIC Partners.
According to the survey, 80 percent of senior executives said their company would not be able to replace them quickly if they left. Despite the fact that almost 6 in 10 respondents said their company had a succession plan in place, only 1 in 5 said their organization would be able to replace them immediately if they were to leave.
“The findings of this survey point to a gap in succession planning at many companies,” says Paul Dinte, chairman of IIC Partners. “It is one thing to have a written succession plan, but quite another to be prepared for the departure of a C-level executive.” Two-thirds of the survey respondents were C-suite executives. When asked if there were a succession plan in place for their position, the senior-level executives responded this way:
- 31 percent said their company had a succession plan and could replace them within 12 months.
- 26 percent said their company had no succession plan and they did not speculate on how long it would take to replace them.
- 20 percent said their company had a succession plan and could replace them immediately.
- 16 percent said their company did not have a succession plan and it would take one to three years to replace them.
- 4 percent said their company had no succession plan and it would take more than three years to replace them.
Companies that reported being least ready to replace a senior executive were not-for-profits (40 percent said it would take up to a year to replace them) and family-owned businesses (37 percent).
Companies from the following industries reported suffering the most when a senior executive departed unexpectedly:
- Not-for-profits (68 percent said it caused some or considerable difficulty)
- Pharmaceuticals (67 percent)
- Professional services (67 percent)
When asked what the most negative impact of an unforeseen executive departure was, the senior-level executives responded this way:
- 38 percent said an unforeseen departure would have a negative impact on the current culture.
- 18 percent said it would lead to the loss or delay of a new product or service.
- 16 percent said it would lead to the departure of another executive.
- 14 percent said it would lead to loss of revenue.
- 13 percent said it would lead to negative publicity.
With so many Baby Boomers leaving the workforce in the next couple of decades, it seems imperative to me that companies create not just succession plans, but knowledge capture plans. These knowledge capture plans would ensure that the expertise and know-how of outgoing top executives doesn’t go out the door with them. In the old days, efforts to capture knowledge, if they existed at all, were confined to an executive memoir, typed or written notes, or, at best, tape or video recordings.
Today, your exiting executives can create internal wikis, prior to leaving. These wikis can list everything from terms important for a person doing his or her tasks to descriptions of how to simplify otherwise complex processes. Outgoing executives also can be asked to post a monthly blog each month of their last year at the company, focusing each month on a different lesson they learned during their tenure or an important memory.
Another idea is to create an arrangement in which exiting executives participate in an internal social network after leaving. Those open to it would be paid a small amount to check in as little as once a week for a couple of hours to answer questions or offer opinions to information posted. Those open to it, of course, could participate even more. These internal social networks could make it easy for former executives to stay in touch with their former colleagues and employees by being accessible on smart phones and tablets.
Effective knowledge capture depends so much on an outgoing executive’s time and willingness to participate that it might even be a good idea to have top executives agree to an extra year in which they are slowly phased out, serving the last year on a gradually diminishing basis. For the first several months of their last year, they could be full time, and then in each successive quarter, they could put in slightly less time, getting their team used to doing without them, and in the process, devoting more and more of the time they have left to passing along their knowledge.
As most of us have experienced, it can take months after starting a new job to feel like we’re fully up to speed and in the know. I’ve had some jobs in which I felt like I didn’t really hit my stride until at least a year after taking the position. If you’re a successful employee, the longer you’re on the job, the more adept and efficient you become. There will be learning curve with even the smartest and most talented executive replacement, so if an outgoing executive can spend a little extra time offering a hand—or at least leaving behind vital information and know-how—so much the better. The rest of your company, not to mention your customers, will thank you.
Do you try to capture the knowledge of exiting executives? How do you do this?
