What happens to an organization when a key leader leaves? Even those in the highest positions of a company eventually retire, move on to another job, or are replaced during an organization’s transition. That’s a challenge when it comes to making decisions and choosing a strategy. Companies that aren’t prepared often struggle, and new leaders may find it difficult to make the right decisions without experience.
However, surprisingly few companies have plans for filling leadership positions. Chief Executive reports only around 54% of Fortune 500 companies are actively developing their CEO successor, while 40% don’t have any picks for a successor at all. Among smaller and private companies, these numbers can fall much lower. A 2021 survey of members of the Society for Human Resource Management showed that only 21% of their organizations had a formal plan for succession. This can spell trouble when key decision-makers in charge of long-term processes leave the company.
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