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Losing a key senior employee unexpectedly can have a dramatic impact on business operations and service delivery, and diminish confidence from members and employees alike. The solution to avoiding this danger is a comprehensive succession plan that encompasses the C-suite and other key leaders whose sudden departure would hinder “business as usual.”
“Succession planning is an important human capital risk management tool that supports continued business operations in the face of an unplanned departure,” says Jay Lux, FCCS Vice President of Leadership and Organizational Development.
Of course, the most critical position in any company is the CEO, with an estimated 45% of an organization’s success stemming from the CEO. CEO succession is a board responsibility, though Farm Credit CEOs are required to designate a successor prepared to step in on an interim basis should the need arise. Jay cautions against considering anyone, even the designated successor, to be ensured the CEO seat.
“Strategies and business needs change, so even with a designated successor, boards of directors would be wise to keep an open mind about other internal CEO candidates, and be prepared to undertake a full CEO selection process when the need arises, based on the business strategy at the time,” says Jay.
Beyond the CEO, the organization’s succession plan should include all key roles where a sudden departure would have a negative impact. For each included role, the plan should identify the skills and attributes needed to thrive, and every potentially impacted employee should be included in the conversation to assess their interest in moving into the position, should it become open. [Please see related Consulting Network article describing steps to develop a succession plan.]
It’s also important to understand that not every position in the organization needs to be included in the succession plan, if the responsibilities can be fulfilled by a colleague until a replacement can be found.
“These typically lower-level positions with less organizational impact can be covered in the business continuity plan,” says Jay. “And although every position may not require a succession plan, in today’s talent market, smart organizations are creating progression plans for every individual on their team to keep them engaged and contributing.”
For more information on how FCCS can support your succession planning efforts, contact Jay Lux at 651.982.4568 or via email.
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