By Dr M. Muneer and Ralph Ward

A CEO at an MNC has been planning to move on from his company for the third year in a row but the board persuaded him to continue for another couple of years each time, saying a succession plan should be kept ready by him before he can hang up his boots. This year would have been his freedom year but for the Corona virus. The board just doesn’t feel a new person can succeed at this stage of turmoil. 

Top-level executive succession planning has long been inconsistent among the world’s corporations and even in large MNCs; it is often vague and reactive on who could be next. Or, perhaps the talent planning and development for top roles are well in place in many organisations, but what is missing might be the chief executive succession plan. In your own organisation, how current and actionable are your emergency succession plans? The Covid-19 crisis has shaken up a lot of certainties about how effective executive succession planning really is. Are your plans in jeopardy because of the pandemic?

Here are a few questions you can ask yourself to find out:

Is your “plan” really a plan? We find that many of our corporate clients realising the harsh reality of dud succession plan at this time. A survey of over 50 per cent S&P 500 companies found that they all believed this was an emergency succession plan. Only about 20 of them had a real, formal, written plan. This is defined as who does what, and precisely how the plan will be implemented. (Note: writing a name and tucking it into an “Open in Emergency” envelope is not a plan). 

Is the plan both deep and flexible? Best practice today is to demand that the current CEO, top team, and the board craft a crisis plan that can be implemented at once, smoothly, and with flexibility. Organisations should have at least two or three names in the list and not just one. This goes beyond assuring leadership in case both #1 and #2 are hit by the same bus. If the current CEO has an unfortunate accident and the current strategy is working, you may have a best-case successor.

But what if the CEO leaves in a scandal, the pandemic-created crisis, or an activist investor demanded the change? You’ll want another name in the envelope who can both lead and shake things up. Consider also a 3-month emergency successor who might step up from the board until a longer-term inside successor can take the reins. Use scenario planning and risk heat maps to craft a matrix of responses.

Will we need a ‘temp’ CEO? In the UK, Prime Minister Boris Johnson was temporarily waylaid by Covid-19, which shook up the British political system that has no provision for a short-term fill-in PM. So what if your company faces this situation? The chief executive must be out of circulation during recovery from illness or injury. How much regular duty can he or she handle during convalescence (if any), and for how long? When we face a virus that is highly infectious and debilitating, such a temporary “understudy” CEO plan is a must.