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Role of CEO, Business & HR in Succession Planning
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Nobody stays in a company forever, irrespective of which post they hold. If the post is that of a CEO, it is important to have a proper succession plan in place to ensure smooth transition. Where some companies expect their CEOs to stay on forever, others are struggling with other problems that lead to various difficulties in CEO transition. The most common mistake that companies make with regard to succession planning is to assume that it is an HR function, thereby allowing only the HR head to handle it. What they do not realize is that for proper and effective transition to occur, the existing CEO, HR heads, business heads as well as the other business stakeholders have to be involved in the succession planning and the transition thereafter.

Benefits of Succession Planning

Prior to getting into details regarding the roles played by each sector of business, it is important to evaluate the benefits of succession planning. Incidentally, succession planning allows for creation of a framework that actually helps align all the senior leadership team members together in congruence with the strategic framework of the company. Additionally, it also allows the existing CEO to actually evaluate the job profile and modify it to ensure that it meets current business needs and requirements. Finally, it also calls for strengthening of the relationship between the board of directors and the senior management team through the consistent flow of information.

Preparing a Succession Plan

This is the first step, which is extremely important. It is significant to note that this plan is a written document that will entail the detailed procedures regarding selection, election and replacement of CEOs in the company. In this regard, the board of directors, existing CEO as well as the HR management team will have an important role as they will be the ones to decide on the various parameters.

Interviewing Candidates

Similarly, when interviewing candidates who have been shortlisted, or even for creating a short list, it is important to know that all three segments namely the CEO, HR and senior leadership team along with the board have a role to play. Given that the CEO will be interacting with all the above members and playing different roles, it is important to ensure that he or she is fit for handling the post. Where the HR can create the norms and standards required for an effective CEO, it will be the duty of the existing CEO and the board of directors to actually interview and select the candidate who will succeed the leaving CEO. Considering external candidates along with internal ones is a great way of ensuring that you are bringing about an effective succession.

Selecting a CEO for succeeding the existing one takes a lot of time and this is something most companies do not realize. Additionally, it is important that the training and selection is holistic, covered by all three aspects of a company. An excellent example of this need can be seen from the succession planning in Coke, where the new CEO had to leave in less than two years despite being groomed for over ten years.

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