The drama taking place in the Royal House of Windsor is not only gripping material for a future episode of The Crown, but also a wake-up call to all businesses to have a plan for when important personnel step down or leadership responsibilities change.
From the mom-and-pop store to publicly-listed giants, succession planning needs to be built in almost at a company’s birth.
History is littered with the wreckage of organisations that suffered from over-reliance on a single person and had no effective plan for succession.
For instance, Reliance used to be one of India’s largest family-owned businesses, operating across sectors ranging from energy to telecoms. Its founder, Dhirubhai Ambani, died suddenly of a stroke in 2002, leaving no will or succession plan.
Management fell to his two sons, Mukesh and Anil. But tensions between them led to the whole business being split in two and a feud evolving that was not finally resolved until 2010.
Dropping dead is perhaps not what is usually meant by stepping down from a role. But however a key organisational player leaves, having someone who can smoothly step into their shoes is essential for good management.
Firms have a choice of either recruiting internally or externally. There are pros and cons to both approaches.
If internal, through a programme of training, mentoring and delegating, talented people can be developed to fulfil the role. A major advantage of this more organic approach is that they immediately understand how the business operates, and will already have developed the key relationships that underpin their role.
Through their career development and a planned programme of introductions, they will have already formed sound relationships with clients, customers, investors, and other stakeholders.
In this light — and going back to the Royals — the increasing role of Prince Charles in official functions of state makes perfect sense.
Conversely, external candidates might be sought if a business feels that there is a benefit to bringing in fresh blood who can implement a significant and much-needed change in company culture.
However, getting an external chief executive requires time, and it also takes a while for them to get their feet under the desk and become effective.
Countrywide’s recent change at the top has seen a newcomer in the form of Tesco’s ex-finance director Bruce Marsh joining as chief operating officer. But while the move was announced in October 2019, his start date wasn’t confirmed for another month afterwards — and with the General Election and Christmas to contend with, any evidence of his output will likely only be surfacing now.
Flexibility is key, and businesses will need to be agile to match people to roles that are likely to undergo dramatic change.
Clearly, it is prudent to have an effective contingency plan should a succession be needed, whether pre-planned through retirement or suddenly due to ill health. Technology can help soften the blow. Properly implemented systems intrinsic to a firms’s culture can ensure a smooth transition and consistent communications — whether in the boardroom or at the grass roots.
Succession plans also mean having a communication strategy in place. This is illustrated in an early episode of the HBO series Succession, where media magnate Logan Roy becomes incapacitated, and his dysfunctional family has to rush to inform the media about leadership contingencies before the stock market opens.
To avoid a family firm farce or corporate coronary, get those succession plans up and running. After all, no one should be irreplaceable.
Main image credit: Getty