Let’s face it—business moves fast. And if you're leading a team or growing a company, you’ve probably got a dozen urgent things pulling at your attention. But here’s one thing that can’t wait: succession planning.
In today’s fast-moving business environment, succession planning isn’t just smart, it’s essential. For leaders responsible for boosting performance and scaling operations, planning for the future is a key strategic advantage.
Whether you lead a global company or a local startup, overlooking succession planning puts your organization at risk. In this guide, we explore why succession planning matters, real-world examples of succession planning wins and failures, and how business leaders can embed it into their organizational strategy.
What Is Succession Planning and Why Does It Matter?
Succession planning is the proactive process of preparing your company’s future leaders and considering their future as potential successors. It’s about identifying high-potential talent, developing internal capabilities, and ensuring operational stability when leadership changes occur, whether planned or unexpected.
Key elements of an effective succession strategy include:
- Recognizing critical roles that are essential to ensuring business continuity and innovation
- Identifying and developing internal talent and growth potential
- Creating a development pipeline through coaching, training, and stretch assignments
- Building short- and long-term contingency plans
For managers and executives, succession planning isn’t just HR’s responsibility. It’s a leadership priority that drives sustainable growth. Effective succession planning isn’t just about scrambling to fill a gap—it’s about playing the long game. It’s about spotting potential early and giving it the space and support to grow.
The Real Benefits of Succession Planning (and Why Leaders Shouldn’t Wait)
Before exploring how other organizations have approached succession planning, it’s important to understand why it’s such a crucial component of a leadership strategy. These core benefits can help make the case for prioritizing succession efforts within your organization.
- Minimize Disruption During Transitions. Organizations with a succession plan in place maintain stability and protect critical business operations, even when unexpected changes occur. Surprises happen; but when you’ve got sharp, prepared people who know your business inside and out, those curveballs are a lot easier to catch.
- Build a Strong Leadership Bench. According to Deloitte, businesses that focus on identifying potential leaders and developing their skills are 1.5x more likely to be high-performing financially. Developing leaders internally is faster, less costly, and aligned with company culture.
- Future-Proof Your Strategy. Succession planning equips your organization to adapt to external challenges, mergers, acquisitions, and market changes. It also ensures that institutional knowledge doesn’t walk out the door.
When done right, succession planning doesn’t just prepare your company for emergencies. It creates a proactive, resilient leadership culture that fuels long-term success.
Now, let’s take a look at how some of the most recognizable organizations have either succeeded (or stumbled) based on the strength of their succession strategy.
The Business Risks of Ignoring Succession Planning: Real World Examples
Without a comprehensive succession plan in place, organizations leave themselves open to several risks. One of the biggest risks is a disruption in organizational performance. A lack of succession planning could also lead to top talent turnover and retention issues.
Let's dive deeper into these risks and explore some real-world examples.
1. Leadership Gaps Disrupt Performance
Although critical, succession planning can be viewed as a daunting task. One Korn Ferry study showed that 87% of companies felt ill-equipped to handle executive transitions. Unfortunately, a lack of preparation often results in delayed decisions, operational slowdowns, and lost momentum.
Apple’s transition from Steve Jobs to Tim Cook worked seamlessly because the company spent years preparing. Jobs had mentored Cook for more than a decade, gradually shifting key responsibilities to him.
Apple’s board was aligned and communicated the transition clearly, which gave stakeholders confidence and preserved market stability. Cook’s leadership style was known internally, ensuring minimal disruption during the handover. Here, Jobs’ long-term succession plan ensured the company didn’t miss a beat—even without him at the helm.
In contrast, Mattel’s CEO exit in 2015 revealed a glaring lack of preparedness. Bryan Stockton resigned abruptly after poor financial performance, leaving a leadership vacuum and a demoralized workforce.
Mattel did not have a clear successor in place, and the board had to scramble to find interim leadership. This sudden shift and lack of a robust succession plan ultimately led to confusion, lower investor confidence, and stalled momentum.
2. Retention Challenges and Talent Drain
Top performers want to see a future for themselves. If leadership development pathways are unclear, high-potential employees may look elsewhere. Transparency and internal mobility are key to retention.
At LinkedIn, a strong focus on internal mobility has allowed employees to grow into leadership roles over time. The company's "Tour of Duty" model encourages employees to define their growth trajectory within the organization, which boosts retention and engagement. This structured career pathing shows talent that there is a future for them inside the organization, not outside it.
Contrast that with Yahoo’s situation during its leadership turbulence. With a revolving door of CEOs and little continuity in strategic direction, top talent grew increasingly disillusioned.
The company experienced frequent turnover, particularly in product and engineering leadership, which contributed to its stagnation and eventual acquisition by Verizon. The absence of visible development paths and internal promotion opportunities accelerated Yahoo’s decline as a home for talented professionals.
More Real-World Lessons on the Importance of Succession Planning (and What Happens When You Ignore It)
As you can see, succession planning is mission-critical to an organization's preservation and survival throughout the years. Here are a few more real-world examples of succession planning wins and losses.
Success Stories:
- Procter & Gamble is known for promoting from within, guided by its Global Leadership Council. When CEO A.G. Lafley returned in 2013 to replace Bob McDonald, it was a smooth, strategic move backed by a deep internal bench. Their long-term approach prioritizes continuity, cultural fit, and readiness.
- McDonald’s succession model emphasizes internal mobility. Don Thompson, a 20-year veteran, succeeded Jim Skinner in 2012. His familiarity with the business enabled a quick, low-friction transition, proof of the company’s strong internal pipeline.
Cautionary Tales:
- Jack Welch built a celebrated succession system at GE, but it fell apart when Jeff Immelt took over. Strategic missteps, weak board oversight, and a heavy reliance on past momentum caught up with the company. Even with a well-documented succession planning process in place, execution and adaptability were lacking.
- In 2012, the board at the University of Virginia abruptly removed President Teresa Sullivan without a clear plan or stakeholder input. The backlash was swift, forcing her reinstatement. The episode underscores how poor communication and lack of succession alignment can destabilize even respected institutions.
Now that we've reviewed real-life succession planning wins and the consequences of falling behind, let's take a look at what leaders can do to maximize their success.
Your Succession Planning Playbook: A Practical Framework
If you're new to succession planning or looking to strengthen your current approach, this step-by-step framework provides a clear starting point. These core actions can help build leadership depth and ensure long-term continuity.
- Identify Critical Positions. Focus on roles that drive value creation and operational stability. Think beyond the C-suite.
- Audit Your Talent Pool. Use performance data and potential assessments to spot high-potential team members early.
- Invest in Development. Offer coaching, stretch roles, and cross-functional projects. Develop soft skills and strategic thinking.
- Create Emergency Plans. Prepare interim leadership structures for sudden exits and unplanned events.
- Align Across Leadership. Ensure leadership buy-in. Keep your board, HR, and executive team in sync.
- Review Regularly. Succession planning should evolve with business strategy, talent movement, and market trends.
Even modest efforts in these areas can have a meaningful impact. The key is consistency. Succession planning should be an ongoing process, not a one-time project.
Unleashing the Potential of Your Organization
Succession planning is more than just naming names. It's about building a process that prepares your business for whatever comes next. From boosting morale and retaining top talent to safeguarding continuity, it's one of the smartest investments a leadership team can make.
Looking for more support around developing your organization's succession plan? Connect with us or consider attending one of our upcoming leadership events.