Critical HR Management Mistake: Forgetting a Succession Plan

Dec. 21, 2009 - PRLog -- In leadership transitions, several companies, including Bank of America and American Express, are setting themselves up for problems. Either they fail to make public their succession plans or they fail in succession planning altogether, according to Seattle Biz Coach Terry Corbell.

“There are at least three serious ramifications in faulty succession plans,” says the Seattle management consultant. “The SEC wants transparency, shareholders are targeting companies that fail in management-succession planning, and it’s a missed opportunity for sustained growth.”

He says B of A and others are teaching us valuable lessons about leadership in succession planning.

“From the stakeholders’ point-of-view, B of A took an exasperating long time to name a new CEO,” says Mr. Corbell. “The delay suggested that the B of A board and outgoing CEO Ken Lewis bungled by not succession planning.”

In citing an authoritative study that shows a large number of companies are failures in making adequate succession plans, he contends the CEO job is too significant to overlook and it’s important for a new CEO to get a running start.

“Brian Moynihan walks into his B of A position facing a barrage of problems,” says the business-performance consultant. “They include an investigation into B of A’s acquisition of Merrill Lynch, friction with regulators, opponents in Congress who have questioned his leadership, and cultural issues within the company.”

Whether it is a small firm, a Fortune 500 company or a public-sector agency, succession planning is vital, according to Mr. Corbell.

“Succession planning should be an ongoing strategic process,” he adds. “It’s imperative for identifying talent and building a reserve bench for development. However, delays in succession planning result in a perceived lack of competence – image problems in the marketplace, among shareholders and internally with employees.”

He says many small companies have it tough because they have to plan for the onerous estate tax – or death tax – as well as making a succession plan.

For his full analysis including tips for small business succession planning, visit: http://www.bizcoachinfo.com/archives/2301.

As The New York Times referred to him in Been There... Done That... Here's How (http://www.bit.ly/8wge7U), Mr. Corbell has more than 30 years experience as a profit professional and business-performance consultant.

He has provided confidential full-service business solutions for Northwest companies ranging from technology to professional service firms, and for the public sector since 1992.

Especially timely in this economic downturn, Mr. Corbell provides a nine-point financial turnaround program, on a pay-for-performance basis, for a small retainer and just one percent of the net-profit increase.

In addition to his Web site, The Biz Coach is also published on the Money News page at KIRO is the "2009 National Edward R. Murrow Award Winner for Overall Excellence." Mr. Corbell has written about 500 business-coaching columns since 2001 for several media Web sites.

To connect with him: http:www.linkedin.com/in/terrycorbell.

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Biz Coach Terry Corbell is a business-performance consultant and profit professional. As a longtime media columnist, he publishes performance-enhancing strategies at The Biz Coach: http://www.bizcoachinfo.com, Proven Solutions for Maximum Profits.