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Newsletter - September 2007

OI Partners

Impact of Failing to Do Succession Planning

September 13, 2007 - Mary Ann Gontin

When the topic of succession planning comes up with executives, regardless of their area of responsibility, most talk about it with the same enthusiasm of doing their taxes or visiting the dentist.  Executives begrudgingly admit that it is something that should be done but often believe it’s an impossible task or don’t know where to begin.  However, the impact of not engaging in succession planning can hit an organization on several levels.

Financial – The owner of a well-known retained search firm recently made the comment that if companies were serious about succession planning, his firm would be out of business.  Obviously, there are situations that develop that succession planning could not prevent, but the majority of searches for talent being conducted today could have been avoided if there was a thoughtful and meaningful succession planning process in place.  So, in addition to the financial investment a company loses when someone unexpectedly leaves, there is also the immediate cost of having to conduct a search.

Loss of talent – When there is little or no succession planning, talented employees can become impatient and dissatisfied if they don’t know what their next role will be.  They may decide to jump ship and look for opportunities with a company that is willing to develop and lay out a career path for them.

Loss of knowledge – With no formal succession planning, organizations risk losing valuable industry and company knowledge.  So much of what people do at work is in their head with little documentation for someone else to understand and continue the job.  Succession planning is also about the importance of keeping knowledge in-house, not just about who will move into an open position.

Just as we know that we need to submit our tax return and visit the dentist, we need to be proactive within our organizations with succession planning.  Failure to take the time needed to do this effectively can result in more losses than an organization is prepared to handle.  However, the positive results of succession planning will be felt throughout the organization for a long time.

Mary Ann Gontin is managing partner of OI Partners, Danbury, CT. She can be reached at mgontin@oipartners.net or 203-790-4507.