By Chris SwanMANAGING DIRECTOR | PRACTICE LEADERExecutive departures have been running high, and the exits reach all the way to the top. Research from Challenger, Gray & Christmas has tracked sharp spikes in CEO departures, with one October seeing 142 chief executives resign, near a record.
Leaders experienced the same reassessment as everyone else during the pandemic years, asking whether the relentless pace was worth it, and many decided it was not. The lesson for organizations is uncomfortable but clear: the leader you rely on today may leave sooner than you expect, and hope is not a succession plan.
The cost of being caught unprepared is steep. Replacing an executive can run to roughly 213% of their annual salary once lost productivity and disruption are counted, and a poor transition drags on morale and results across the organization.
Yet preparation lags badly. In the AEC sector, for instance, about 66% of executives name succession planning as a top concern, while fewer than half actually have a plan in place.
Here is how to close that gap.
The best time to plan for a leader's succession is the day they start, not the day they resign. Treat succession as a standing board agenda item rather than a crisis response.
When it is a continuous process, a sudden departure becomes a manageable transition instead of an emergency, and a planned one becomes a genuine opportunity.
Do not plan to replace the person, plan to meet the moment. Start from where the organization is heading: your competition, your clients' future needs, your culture, and the technologies reshaping your field.
Then define the successor profile against that strategy, weighting the traits that will matter most, such as resilience, empathy, adaptability, humility, and authenticity. The goal is the leader the organization will need, not a copy of the one leaving.
Your best individual performer is not automatically your next executive. Identify high-potential leaders for the mission-critical roles you will need filled in the next three to five years, and assess them against the competencies those roles actually demand, strategic thinking, interpersonal skill, the ability to coach, and comfort with complexity.
Objective assessment matters here, because promoting on the strength of past performance alone is how organizations end up with a strong manager in a role that needed a leader.
Succession planning done in a narrow room produces narrow successors. The leadership ranks of corporate America remain strikingly homogenous, and organizations that widen the aperture, diversifying their boards and bringing CHROs and CFOs into the planning, build stronger and more resilient benches.
Diverse perspectives in the process lead to better decisions about who leads next.
Once you know the gap, you have two paths. Develop internal talent through formalized plans and real mentoring, which preserves culture and continuity, or recruit externally when the organization needs vision or expertise it does not currently hold.
The strongest approach does both: build your bench deliberately, and stay open to an outside hire when the strategy genuinely calls for one. This is exactly where a search partner earns its place, mapping the external market so the choice between internal and external is made with full information.
Succession planning is not a document you write once and file. It is an ongoing leadership discipline that decides whether your organization sails through its next transition or stalls in it.
Our sector-specific work on succession in construction firms and power infrastructure leadership goes deeper, and our succession planning practice can help you build the bench before you need it.
On day one of a leader's tenure, not when their departure is announced. Succession belongs on the board's regular agenda so that when a transition comes, planned or sudden, the organization is ready rather than scrambling.
It depends on the gap. Internal candidates carry culture and continuity, while external candidates can bring fresh vision or expertise the organization lacks. Strong succession planning develops internal talent while staying open to an outside hire when the strategy calls for it.
A great deal. Replacing an executive can run to roughly 213% of their annual salary once productivity, morale, and disruption are counted, which is why planning ahead is far cheaper than reacting.
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