By Susan Battley

A succession plan is like a will. Everybody knows they should make one, but nobody wants to think about the day they’ll need it.

However, with 60 million baby boomers leaving the work force over the next 10-15 years, leaders simply cannot afford to ignore the issues of succession and next-generation talent grooming.

A survey by the National Association of Corporate Directors found that 45 percent of boards of directors at companies with more than $500 million in sales had no meaningful CEO succession process.

We’ve had reminders of how succession issues can strike, often when least expected. The board of McDonald’s had to address not one but two CEO successions in 2004, first with Jim Cantalupo’s sudden death and again when illness forced his successor Charlie Bell to resign.

Consider that the lack of a succession plan was a key reason for investor ire towards Disney CEO Michael Eisner. A whopping 43 percent of voters opposed his re-election at the company’s 2004 annual meeting even though he was running unopposed. The Disney board quickly removed him as chairman.  Eisner stepped down as chief executive - and from the board - in September 2005.

The problem extends beyond the corporate world – 85 percent of nonprofit executive directors are expected to leave their positions between 2000 and 2007, and their most obvious successors, such as deputy or associate directors, tend to be the same age.

This lack of planning comes at a time when America’s leaders - across the board - can least afford it. Talent searches take longer than ever these days, and the demographic trend toward more retirements suggests the problem will get worse before it gets better.

Some executives may find the idea of grooming a successor threatening, but leadership vacuums can put an organization at a competitive disadvantage because of a lack of innovation or strategic planning during times of crisis.

Unfortunately, when it comes to succession planning, emotion often takes the place of business sense. On his deathbed, Louis XIV of France reportedly said, “Après moi, le deluge” (“After me, the flood”). That kind of egotism is deadly, even in a time when revolutions are fought with laptop computers rather than swords.

Leaders and top managers should identify one or more people capable of assuming their responsibilities. To do that, they must purposefully surround themselves with talented people and get to know their strengths and weaknesses. Next-generation leaders need to be identified in a systematic way and given varied assignments to assess and enhance their capabilities.

Within a week after General Electric CEO Jack Welch selected one of three top executives to succeed him, the two men he did not hire took top jobs at other Fortune 500 companies.

Warren Buffett, legendary head of Berkshire Hathaway, told shareholders in 2004: “We've got four people who could do my job maybe better than I can. We're well equipped."

Whether you’re a CEO, board director, entrepreneur, practice head, senior administrator, or human resources manager, can you say the same?

Copyright © Susan Battley, PsyD, PhD. All rights reserved.