A new poll of blue-chip companies shows only about half have a definite succession
plan should their CEO or MD suddenly depart. The other half risk a potential
leadership vacuum that could have negative effects ranging from a drop in share
price and shareholder confidence all the way through to job losses and even the
eventual failure of the business.
The country’s leading executive search firm, Jack Hammer Executive Headhunters, has
analysed data from a poll conducted with leading firms in the financial services,
FMCG and engineering sectors. While about half confirm that a clear succession plan
is in place and the successor identified, others indicate that leadership teams have
been “fragile” and lacking in depth for the “past few years” and only some
departments had a plan – while others are rudderless.
Debbie Goodman-Bhyat, the MD of Jack Hammer and an expert in long-term, strategic
succession planning, says it is critical for corporates to have a plan in place to
make any transition in leadership as smooth as possible.
“Although most top executives have relatively long notice periods in their contracts
so that they can hand over the reins seamlessly, the time it takes to source the
right executive for the role is often under-estimated. Further, just as the current
incumbent may have a three- to six-month notice period in place, so too will the new
“Further, while there may be several potential candidates working at competitor
organisations with the skills and experience to step into the parting leader’s
shoes, the key factor in a successful leadership transition is ‘fit’. This three
letter word encapsulates all of the less tangible but absolutely critical issues
such as culture, values, EQ, etc,” notes Goodman-Bhyat.
“An organisation takes its cues from the head. Get the successor wrong, and you risk
upsetting shareholders and disenchanting staff – as well as costing the company a
pricy severance package. A leadership ‘wobble’ could echo through the company for
years down the line.”
She points out that the best successor isn’t necessarily the current second-in-command.
“Some people are excellent in support positions and leaders need these people. But,
just because they’re close to the action, it doesn’t automatically follow that they
will easily and comfortably step into the CEO’s shoes.
“Modern succession planning needs to be strategic rather than sentimental. And if
the decision to appoint an external successor is going to result in the noses of
potential internal candidates being out of joint, or even their departure from the
organisation, this should not stall bold decision-making regarding the right
Goodman-Bhyat says companies have to weigh up transparency – where everyone,
including rivals, knows the succession line – against strategy, where staff are
buoyed and competitors awed by the new arrival of a new broom.
“One cannot under-estimate the impact of the appointment of a respected and admired
professional to a key role in an organisation – an individual with top credentials
and a reputation of achievement will not only have a positive impact on the current
staff complement, but will also be able to attract talented executives from other
organisations who are keen to be part of a winning team.”
Frequently, when a new leader is appointed, there is an automatic executive shuffle.
She suggests that new leaders carefully consider what approach they will take when
it comes to their supporting team.
“If the company is in the doldrums and you’ve been brought in to shake things up,
then best you be bold and do so, after doing due diligence, of course. But, if the
firm is stable and you’re taking over from a successful and well-liked MD, drastic
and immediate changes could upset staff and customers. You tread a fine line between
revolutionising the status quo and maintaining it.”
ISSUED BY: Lange 360
ON BEHALF OF: JACK HAMMER EXECUTIVE HEADHUNTERS
For more information contact:
Debbie Goodman-Bhyat at Jack Hammer Executive Headhunters on 021 425 6677
About Jack Hammer Executive Headhunters
Jack Hammer provides a fresh approach to executive headhunting by cutting through
the ordinary. They have achieved this over the last decade by using strategic
research to drill down and expand their market intelligence beyond the obvious and
source the real gems of talent. The knowledge gained in the process enables them to
give clients a competitive edge by ensuring they find the right executive talent –
in a manner that is both responsible and ethical.
Debbie is the founder and Managing Director of Jack Hammer Executive Headhunters –
rated by the Business Day as one of SA’s leading executive search firms.
Jack Hammer, with Debbie at its helm, has become a cornerstone of the South African
headhunting sector, continually and vocally aiming to raise the bar in the local
executive search industry. As a result, in 2011 Jack Hammer was selected as the
exclusive South African partner of IRC Global Executive Search Partners, a top 10
global search firm, and has now extended its global footprint to more than 70 cities
Debbie is a founding member of the Cape Town Chapter of EO – a global
Entrepreneurship Organisation with more than 8500 members worldwide.