The Secrecy of Succession Planning

Sunday, September 2, 2012
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When Steve Jobs announced his medical leave in January 2011 -- thereby raising obvious concerns about Apple's future leadership -- shareholders rejected a proposal that would have required the adoption and disclosure of a detailed, written succession-planning policy.

According to The Conference Board's 2011 CEO Succession Report, the board argued that adopting the proposal would provide competitors with an unfair advantage. Apple is not alone in its concerns, of course. Issues related to how transparent to be when it comes to succession planning exist in large and small companies and down through all levels of the organization, not just the C-suite.

In fact, a recent survey of 300 senior managers and executives conducted by AMA Enterprises, a division of the New York-based American Management Association, indicates that only 11 percent say their organizations are "very transparent" with regard to succession planning; 38 percent keep their high-potential selection criteria secret and 28 percent don't share information on admission to leadership programs.

Why the secrecy? While every company and situation will obviously be different, experts suggest the reasons they -- and their HR leaders -- have a tendency to be quiet about succession planning include: worriess over competition and business impact, that there is no actual plan, that they may change their minds, and that those not "on the list" may become disengaged and disgruntled.

Rita Gunther McGrath, an associate professor at Columbia Business School in New York, says succession planning may not be as widespread as some may think.

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"An awful lot of companies don't have real plans to be guarded about," she says. "That's a little secret at many firms."

Sandi Edwards, senior vice president for AMA Enterprise, says she doesn't believe that is entirely true. Whether companies have a formal written plan or not, they do have a plan, she says.

"Informally, we all have a plan. Even if we do nothing formal, we say, 'You know, Harry could probably do this . . . ." But, she adds, "That's not enough. It's really laying out and making sure the high potentials in your organization, regardless of level, are identified." However, even those companies that commit succession plans to writing may be hesitant to go out on a limb and make the plans public.

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