Sudden leadership exits detriment business

5/11/2012



Unexpected departures at top level can have serious, trickle-down effects for a business, a new report has discovered.

Whether a CEO leaves a company in a blaze of publicity or for health reasons, it has been confirmed that the sudden departure of a leader can negatively affect staff and productivity - especially if a successor has not been appointed.

That's according to SHL, the psychometric assessment expert, which conducted a study among 250 large companies. It found that sudden leadership changes had occurred within around 50 per cent of these companies, telegraph.co.uk confirmed and 32 per cent reported a decrease in employee morale as a result. 

Additionally, 19 per cent claimed the sudden lack of leadership - due to the lack of succession planning - had stalled company growth. The survey found that while succession planning did exist in most of the companies polled, it was concentrated on identifying and filling 'critical roles' across the workforce; exit strategies surrounding the CEO were largely overlooked.

In fact, two-thirds of businesses were found not to have any such high-level succession plans in place; an absurd fact, given that 28 per cent of those polled said it had taken them more than six months to recruit a new CEO.

SHL's Melanie Long said that succession planning was crucial for innovation and growth, making it important for all businesses to know where their "future leaders will come from".

She concluded on hrmagazine.co.uk: "In this competitive market for talent, it appears organisations are shifting their focus to succession planning for the 'engine room' of the company, those that are innovating, creating value and delivering results.

"However, given the negative effects of losing a leader, succession planning needs to focus on identifying potential leaders for critical roles regardless of whether they are at the tip or across the organisation."


















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