Global executive search firm IIC Partners released the results today of a survey of 1,270 senior-level executives. Most respondents occupy the C-suite—41 percent in the Americas; 30 percent in Europe, Middle East, and Africa; and 27 percent in the Asia-Pacific region. Across all geographies, the survey found that many companies have implemented formal succession plans, but the majority of those plans are not very effective.
More than half of the survey’s respondents said their company has a succession plan in place, but only one in five said the organization could replace them immediately if they left. (See Figure 1.) “No matter the location or the industry, there remains a gap in succession planning by many organizations,” says Paul Dinte, chairman of IIC Partners. “It is one thing to have a written succession plan, but quite another to be prepared for the departure of a C-level executive.”
When asked about the impact that an unexpected senior-executive departure might have on their organization, the largest proportion of survey respondents (38 percent) said an unforeseen departure would have a negative impact on the corporate culture. Nearly one in five (18 percent) said it would lead to the delay or loss of a new product or service, and 14 percent said it would lead to loss of revenue. And one in six (16 percent) said departure of one executive would lead to the departure of another executive.
IIC Partners projects that challenges around succession planning will be exacerbated in the coming years. “The findings of this survey point to a gap in succession planning at many companies,” Dinte says. “This oversight will likely be worsened with the continued exodus of Baby Boomers from the workplace, as well as the different relationship with work that many younger employees have. Gen-X employees tend to change jobs more frequently. As this generation moves into C-suite positions, corporate expectations for length of service may have to be adjusted.”