Last Updated on January 12, 2024
Last week I was in our company-wide quarterly meeting when I heard that John Verry, our founder, said that he had put together a CEO succession plan in case something should happen to him. Being the corporate coordinator for our business continuity plan (BCP), I suggested that he and I talk to figure out what needed to be included in our plan. John not only agreed that we needed to discuss it but also acknowledged that he really hadn’t considered the continuity aspect of his succession plan.
It’s worth noticing how the observations and processes differ between a continuity professional and most others. Most employees in an organization think operationally along functional lines, but recovery planning professionals see things from a different angle—that of a professional “What-iffer.”
If we as professional recovery planners don’t cause the proverbial light bulb to turn on, then we’re not doing what we need to be doing. When I’ve gone through several “what-ifs,” perhaps causing a bit of exasperation usually marked by someone saying “Enough! Knock it off already!” that’s when I know I will have a continuity plan that captures the information that will very likely be needed if there’s a disruption.
How CEO Succession Plans Can Keep a Company Alive
Most recovery planners know to implement a leadership succession plan and to recommend policies that preclude all C-level executives from traveling together. This isn’t recovery planning 101, it’s more like 201, but you get the idea. But getting back to Pivot Point, what do you do when you’re privately held with one executive? In that case, it’s a matter of keeping your eyes and ears open and recognizing that effective succession planning requires some documentation.
Documentation Needs for CEO Succession Planning
- The documentation to help with getting through difficult times.
- The documentation to help the remaining staff when the person you rely on to make decisions suddenly is the casualty of the disaster.
- Ensuring the business continuity plan answers those pesky “what-ifs” and provides the framework that keeps ad hoc decisions in line with corporate goals.
So, why should we include viable CEO succession planning in our BCPs?
There was an article in Forbes that talked about a study conducted in Norway. Apparently, Norway keeps very detailed records on businesses. I guess it’s to get their minds off how cold it is. Anyway, the study looked at 341 privately held companies that were up to 10 years old when the majority owner and founder died.
The ROI for Businesses with Succession Plans
Within 2 years:
- Sales dipped by an average of 60%.
- Employment dropped by an average of 17%.
- The survival rate of firms where the owner died 2 years afterward was 20% lower than at similar firms where the owner was still alive.
That’s why we need to care.
So, I wish long life to John and the others out there with the entrepreneurial spirit who work to keep the rest of us working.
To start a conversation on your company’s succession planning and business continuity planning needs, contact Pivot Point Security.