Sustainable Succession Planning
Article
istock.com/FangXiaNuo
8 September 2020
The tenure of the CFO of a start-up we consult for was due to get over after three years with his contract renewal in February 2021. Given his stellar performance so far and assuming a three-year leeway to work with, the founders had plans for the finance second-in-command to seamlessly fill in the position when the time arrived – at least 3 years later. Everything looked well planned and on track for the next round of funding.
It was the perfect plan...till the CFO resigned.
The client asked us to not only help find a new CFO, but to also help them avoid such disasters going forward.
Impact of Improper Planning
There is research to show that even though 86% leaders believe that succession planning is an "urgent" priority, only 14% believe they do it well. The lack of proper succession planning could have domino-like effects:
- creating gaps along the succession line
- hampering growth, and the momentum of the company
- fall in employee morale and rise in attrition due to ensuing confusion
The longer the time it takes to fill the gap, the greater would be the damage.
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