Overcome the five biggest challenges in preparing for a handoff.

By Philios Andreou

HBO’s runaway hit series Succession follows a media company as it grapples with challenges replacing its founder, Logan Roy. In the series, Roy’s three children compete with long-tenured employees to become the next CEO. Roy constantly tests the candidates in unorthodox ways — sometimes using tactics that blur the lines of integrity and society. Like the proverbial train wreck that we can’t stop watching, the drama captivated audiences until the final reveal (no spoilers here!).

In the real world, identifying and naming a new C-level candidate can also feel like a TV drama and is often followed with the same fascination by others at the company.

Most of the time, the candidates aren’t perfect or ready, but getting the decision right is critical for the business. The root of the challenge is the hiring process; it’s difficult to find a candidate with the vision and capabilities to meet the present and future needs of the organization. In fact, between 50% and 70% of executives, both internal and external candidates, fail within the first 18 months of their promotions, according to research from the Corporate Executive Board. Why is that? And how can other company leaders set them up for success?

Let’s break down the five biggest challenges in succession planning and how you can overcome them.

1. Agreeing on the Profile

The first challenge many companies face is getting the board and C-suite to build and agree on the profile of this new leader. The breakdown occurs for one of two reasons: They don’t agree on who owns the process, or they don’t agree on what they need. 

In most succession scenarios, the board chair and seated CEO agree on an approach and strategy for succession planning that will be refreshed at least twice a year and raised consistently on the executive committee agenda. Succession candidates must be deeply immersed in the current business strategy, the future direction of the organization, and all the nuances within. In many organizations, decision-makers have familiarity bias and look for leaders similar to those exiting their roles.

2. Building a Process

You’ll want to build an identification and evaluation process to select suitable candidates. Why is this difficult? Because companies often rely on business metrics, career accomplishments, and sector experience as the driving criteria for a role. These elements are important but are table stakes for any C-level position. What’s missing is evaluating a potential executive’s leadership style, character, and culture fit. Given the criticality of the position and its impact on the organization, it is important you ensure two things:

Multidimensional input. Multiple sources of information provide a more holistic picture of the candidate. These sources could be 360-degree evaluations, structured interviews, psychometric tests, etc., to build transparency around how the leader operates, interacts, manages ambiguity and conflict, and inspires a shared vision.

Complex and simulated future situation assessment. The candidate should be observed performing the future role by experiencing problems, situations, and presentations as they would on the job. This type of virtual simulation allows organizations to see the candidate in action and provides insights into how they weigh strategic decisions; manage the business, people, and situations; and approach stakeholder management.

3. Creating Readiness

No internal candidate will likely be ready at first, and therefore, any selection is a leap of faith that the candidate can hit the ground running. The success of your succession process requires preparing the candidate with a foundation for communicating, making critical decisions, aligning their team, and marshaling the action of the organization. You must provide training, coaching, or special projects that create moments for them to experiment, learn, and grow.

4. Being Transparent

In the case of HBO’s Succession, the drama in all four seasons is caused by secrecy and suspicion — from wars between candidates and confusion in the organization to loss of value when no one is focused on the business. Even in the best scenarios, transparency can be difficult to achieve due to confidentiality issues; however, when processes are better planned, there are also fewer problems. 

The single most common question clients ask us is, “How much should we share?” Like any significant set of decisions with broad organizational impacts, the answer is to share the process but protect the people. If you start early and provide good transparency about the role’s criteria, opportunities for development, timelines, and the succession process itself, you build trust and confidence in the process.

5. Onboarding

This addresses the issue of how to incorporate the candidate into the position so they can be successful. The first few years in the new role are critical for a CEO to build trust and credibility and create a shared strategic vision for the team. During this time, the CEO’s objectives should be to reduce risk by creating a safe environment, evaluate challenges, generate discourse among diverse audiences, establish and manage relationship dynamics, develop the executive team, and make proposals and decisions. On many occasions, the onboarding process can be reinforced by the presence of the previous CEO, a close relationship with the board chair, or the support of an experienced executive coach specializing in CEO transitions.

To preserve your organization’s culture and prepare for any type of transition, succession planning must be a fundamental part of your business strategy. By leveraging a holistic, transparent process anchored in a profile that reflects what success looks like now and in the future, it’s possible to ensure a smooth C-level transition and a lasting future for the organization.