The appointment is the final decision in succession. The real work begins years earlier.
Every chief executive and critical leader will eventually leave. The timing may be planned, accelerated or entirely unexpected. Yet many organisations still treat succession as a search process activated when a vacancy becomes visible.
At that point, options are already constrained.
McKinsey research has found that between 27 and 46 per cent of executive transitions are viewed as failures or disappointments after two years.[1] Research in management and governance has also shown that succession quality is shaped well before selection—through the rigour of the process, the information available to the board, candidate development and the influence of the incumbent CEO.[2]
The central mistake is to treat succession as replacement. Succession is the continuing work of ensuring that the organisation has leadership options appropriate to its future.
Begin with the future mandate
Boards often start by discussing names. They should start by discussing the organisation.
The leadership profile required for the next phase may differ significantly from the one that produced success in the current phase. A business moving from entrepreneurial growth to operational scale needs different emphasis. An organisation facing digital disruption, international expansion, cultural repair or a change in ownership may require a different balance of capabilities, experience and leadership style.
The first succession question is therefore not, "Who could replace the current CEO?" It is:
What will the organisation require from its leadership over the next three to five years?
That mandate should connect strategy, context and culture. It should identify the few outcomes the next leader must deliver, the situations they must be capable of navigating and the personal qualities required to lead credibly in that environment.
Without this future orientation, succession processes tend to favour the most familiar candidate, the strongest current performer or a person who resembles the incumbent. Those may be good candidates, but familiarity is not evidence of future fit.
Build options, not an heir apparent
Anointing one successor too early can create false confidence. It may reduce the quality of development, discourage other talent and make the organisation vulnerable if circumstances or strategy change.
A stronger approach builds a portfolio of options:
- leaders who could provide emergency cover now;
- candidates who may be ready within one to two years;
- longer-term talent requiring broader experience; and
- external market perspectives that test the strength of the internal bench.
This is not about conducting a permanent contest. It is about maintaining organisational resilience.
Harvard Business School professor Joseph Bower has argued for developing "inside-outside" leaders: internal candidates who understand the organisation deeply but have sufficient breadth and perspective to challenge it.[3] That idea remains valuable. Continuity and change should not be treated as opposites. The strongest internal candidates can carry institutional understanding while still being prepared to lead a different future.
Development must be consequential
Succession plans often list candidates and readiness dates without changing the experiences those candidates receive. The document is updated; the leadership bench is not.
Readiness develops through work with real stakes:
- accountability for an enterprise-wide priority;
- exposure to the board and external stakeholders;
- leadership across functions, markets or business models;
- responsibility for difficult transformation or performance situations;
- experience with capital allocation, risk and commercial trade-offs; and
- candid feedback supported by coaching or mentoring.
In my own work assessing and developing senior leaders, the most useful question has rarely been whether someone performs well in their current role. It is whether the evidence suggests they can succeed at a materially different level of complexity, visibility and enterprise accountability.
Potential should therefore be tested through experience, not inferred only from reputation or assessment data.
Clarify the roles of the board, CEO and people function
CEO succession is unambiguously a board responsibility. The board must own the future mandate, the integrity of the process and the final decision.
The incumbent CEO nevertheless has an essential role in building the leadership bench. They understand the organisation, can create developmental opportunities and should regard the strength of the next generation as part of their legacy.
The people function provides process discipline, evidence, market intelligence and continuity. External advisers may add independent assessment, challenge and benchmarking.
Problems emerge when these roles blur—particularly when the incumbent controls the field of candidates or when the board becomes involved only near the point of appointment. McKinsey's work on succession bias highlights the risk of similarity bias and recommends formal processes that gather independent perspectives and depersonalise evaluation.[1]
The goal is constructive partnership with appropriate independence.
Separate development from selection—then connect them
Development should be broad enough to strengthen the organisation, not limited to a secret shortlist. Selection, when the time comes, must be rigorous and specific to the future mandate.
The two processes are connected but not identical.
Development asks: how do we deepen the pool of leaders capable of greater responsibility?
Selection asks: who is best suited to this particular mandate, in this context, at this time?
This distinction reduces politics and helps organisations avoid making promises they cannot responsibly keep. It also recognises that a leader can be exceptional and still not be the right person for a particular phase.
Plan the transition, not only the appointment
A succession decision is not complete when the announcement is made. The transfer of authority, relationships, knowledge and confidence requires deliberate design.
Boards should consider:
- the outgoing leader's role and boundaries;
- what stakeholders need to hear and from whom;
- how the incoming leader will build relationships with the board and executive team;
- which early decisions should be accelerated or deferred;
- what support will help the new leader learn without becoming captive to the past; and
- how success will be assessed during the first year.
An unmanaged transition can weaken an otherwise sound appointment. A well-designed transition protects continuity while establishing the authority of the new leader.
Make succession part of the operating rhythm
Succession should appear on the board and executive agenda before it becomes urgent. A practical annual rhythm includes:
Reconfirm the future mandate
What has changed in strategy, context or stakeholder expectations?
Review emergency readiness
Who could assume critical responsibilities immediately, and what would the transition protocol be?
Examine the bench
What evidence supports current readiness assessments? Where are the gaps in depth or diversity?
Commit to development moves
Which experiences, feedback and exposure will materially increase readiness?
Test assumptions externally
How does the internal pipeline compare with the capabilities available in the market?
Review transition risk
What relationships, knowledge or dependencies could make a future handover fragile?
This moves succession from a static chart to an active leadership system.
Stewardship before urgency
Succession is sometimes uncomfortable because it brings together performance, ambition, identity, mortality and power. Avoidance is understandable—but it is not responsible governance.
The strongest leaders and boards treat succession as stewardship. They develop people without making premature promises. They create options without destabilising the current leader. They plan for continuity while remaining open to change.
Most importantly, they begin while they still have time.
The vacancy should not start the succession process. It should reveal the quality of the process that has already taken place.
Questions for a board and CEO
- What will the next phase of strategy require from the future CEO?
- Who could provide credible emergency leadership tomorrow?
- Which candidates could be ready in one to three years, and what evidence is missing?
- What consequential experiences are we giving potential successors now?
- Where could familiarity, similarity or incumbent influence distort our judgement?
- Have we designed the transition as carefully as the selection?
Sources and further reading
- McKinsey & Company (2024), Bias Busters: Next in line? A structured approach to succession planning. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/bias-busters-next-in-line-a-structured-approach-to-succession-planning
- Schepker, D. J., Nyberg, A. J., Ulrich, M. D., & Wright, P. M. (2018), “Planning for Future Leadership: Procedural Rationality, Formalized Succession Processes, and CEO Influence in CEO Succession Planning,” Academy of Management Journal, 61(2), 523–552. https://doi.org/10.5465/amj.2016.0071
- Harvard Business School Working Knowledge (2007), Growing CEOs from the Inside. https://www.library.hbs.edu/working-knowledge/growing-ceos-from-the-inside
- Nyberg, A. J., Cragun, O. R., & Schepker, D. J. (2021), “Chief Executive Officer Succession and Board Decision Making,” Annual Review of Organizational Psychology and Organizational Behavior, 8, 173–198. https://doi.org/10.1146/annurev-orgpsych-012420-061800
- McKinsey & Company (2015), CEO succession starts with developing your leaders. https://www.mckinsey.com/featured-insights/leadership/ceo-succession-starts-with-developing-your-leaders
- Spencer Stuart (2025), 2025 U.S. Spencer Stuart Board Index Highlights. https://www.spencerstuart.com/-/media/2025/10/ssbi2025/2025_us_board_index_highlights.pdf