Who is on your short list of successors? As a CEO, if you’re not sure of the answer to that question, you are placing your organization at significant risk. While it’s all too easy to think our tenure will last forever and there’s no one good enough to take our place, the ego must be pushed aside to recognize what’s best for our company, first and foremost. That begins with the identification of the best possible candidates now and a focus on nurturing them over time so there is at least one (if not more) viable options ready when needed.

According to a recent survey conducted by Forbes, however, the lack of succession planning worldwide is a notable problem. Results show that nearly 60% of responding 204 C-Level executives say their companies do not have succession plans in place. Yet, more than 70% of respondents said they weren’t surprised to hear that nearly two-thirds of large U.S. companies operate without formalized plans in place (Harvard Business Review).

So, why should we do it?

According to the Panel…
A group of executives recently came together as part of a panel organized by the executive search firm, Korn/Ferry International in Mumbai, to discuss the importance of succession planning. The three executives participating in “The Lessons in Leadership Transitions & CEO Successions” discussion provided the following reasons when asked why CEOs should make it a top priority:

Dow Chemical International—Vipul Shah, the president, CEO and Chairman, targeted the importance of executive talent development as the role of the CEO, not the HR department. Already holding the position means having a full understanding of what it takes to fill that role, and therein recognize talents and abilities in others to do the same. Focusing on talent development then gives the CEO the ability to tailor or shape talent of the future in order to ensure current efforts and direction are maintained (and the legacy is intact).

Kimberly-Clark Lever—The CEO, Prakash Iyer, MD, expressed concern about the tendency for CEOs to place themselves in silos away from the rest of the organization. Instead, his practice is infiltrating all of the organization, down to the front line—motivating by allowing others to see him as one of them. This not only sets an example for how the organization should operate beyond his tenure, but provides the CEO exposure to even more talent and ability throughout the ranks.

Korn/Ferry International—Indranil Roy, MD, Asia Pacific, Leadership and Talent Consulting, said succession planning is bigger than just the CEO and should be taken on collectively by all of senior management, much like a generational passing of the torch. “The issue is not about CEO succession; it’s about the succession of a senior management team from one generation to another,” he said. “Despite that, a lot of the work we do focuses on one individual whereas we need to hand over transition collectively.”

Succession Success
Sheldon Adelson, the chairman and chief executive officer of the Las Vegas Sands Corporation, has been quoted a number of times as saying: “Why do I need succession planning? I’m very alert, I’m very vibrant. I have no intention to retire.” What a way to roll the dice though.

The smarter approach is to take responsibility as well as some control of the situation while it’s yours. Realize that you, as CEO, have a chance to make the accomplishments of your tenure stick and impart upon the organization, at least to some degree, all it needs to continue achieving success after your departure.