Q011
Who needs
A succession plan?
our take .
While key person risk is most commonly associated with the role of CEO, that doesn’t mean other individuals are not seemingly irreplaceable in practice. Tim, our CIO, would tell you that everyone should be working to make themselves obsolete. But, and especially for those who are not CEO, doing so requires a trust and discipline that many will not volunteer (or document).
Run through the call tree for a variety of situations and identify who would get the call, when, and why. For instance, why does the lead engineer get called every time there’s a quality control issue? Why does the semi-retired manager have to provide access codes for new hires? Why is there only one estimator?
Bottlenecks oftentimes represent key person risks. But then comes the hard work of figuring out why no one else has been successfully trained to back that person up, and whether that person is willing to document their work and train others.
The CEO and/or board is ill-equipped to appreciate each role’s nuances, and ideally needs to establish both the expectation and trust for someone to lead their own charge on becoming replaceable. And that’s where culture becomes particularly critical. Would your employees trust you?
on paper.
character to consider: Spiro Agnew
Don’t skimp on the risk assessment
1973. Washington D.C. Amid turbulence and scandal, Vice President Spiro Agnew resigns. His sudden departure, fueled by allegations of bribery and tax evasion (under the general storm of public sentiment and the specific tornado of the Watergate scandal) threw the Nixon administration into chaos at a time when they could have used any bit of stability they could muster. Agnew’s rise was more about political calculus than a careful evaluation of his fitness for high office – and was noted at the time. As a successor Agnew was a rocky choice. In this case, Agnew’s track record as Maryland governor – including financial improprieties – should have flagged him as a high-risk individual requiring careful contingency planning. And so as a successor, Agnew himself needed a backup.
Replacements for the replacement
At the time, the United States had no Vice President after Agnew left office, and the 25th Amendment’s process for appointing a replacement highlighted how critical it is to plan for unanticipated vacancies. We finally got to Gerald Ford, but that was a process fraught with uncertainty. Granted, there was a process – via the 25th Amendment, which allows the President to nominate a Vice President with congressional approval. But even with a process to follow, the process wasn’t easy – congressional scrutiny, public anxiety, and overall uncertainty reigned. In any organization, succession plans for key roles should extend beyond the primary successor to include secondary and even tertiary candidates. Vet your backups, back up your backups, and plan for worst case scenarios for any key position.
Works consulted:
For God So Loves Spiro Agnew That He Made Him Vice-President
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