According to the Wall Street Journal, SurveyMonkey announced on May 8th, 2015, one week after the sudden death of its CEO, David Golberg, that Zander Lurie, a GoPro Executive, would step in as its interim Executive Chair for the board for three months while the company searches for a new CEO, inside and outside the company. (It is not uncommon for a board member to be appointed as interim Executive Chair under these circumstances.)
While SurveyMonkey is privately held, its well-respected CEO also led its board and an organization of ~500 people. The significance of his having held both roles can’t be overstated. As the CEO he had the responsibility to own the vision and create the culture of the organization. Leadership and vision like his, with his nurturing style, are most often the reason people want to belong to an organization and trust that it can and will succeed. And, as he was also the Chair of the board, especially given the growing range of challenges now competing for the board’s attention, the entire board (and its leadership) are going through an unexpected and significant transition.
I don’t know first-hand what plans, if any, SurveyMonkey had in place for a potential loss at its helm, but I do know how a tragedy like this can affect an organization when it doesn’t have a succession plan in place.
Regardless of who inherits a role through a succession plan—a best friend, a leader from the competition or an internal, top notch executive—planning for a transition in CEO leadership can’t be overlooked, and its importance to the ongoing success of an organization can’t be underestimated.
Events like David Goldberg’s passing remind us that things can change in an instant, and our organizations must be prepared for the unexpected.
To ensure that your organization is ready for the unpredictable, I invite you to consider these guiding principles:
Understand that having a succession plan is not optional. Don’t underestimate the importance of having a succession plan because you believe there are a number of viable candidates and top talent to attract, and/or through the assumption that nothing will happen.
Make succession planning an absolute priority, at the board level, for good governance. Keep in mind that having the same individual in both the role of CEO and Executive Chair is not the current best practice for good governance.
CEO succession planning should not be delegated to the CEO. The board must take charge of succession planning. In the optimal scenario, the board and its CEO are transparent about the process, in alignment enough to ensure that successors can be adequately mentored and confidentiality will be honored. Trust, respect, maturity and good communication are essential. The board can’t back out or give up if the CEO is uncomfortable during the process. Although they mustn’t be alienating, the board must focus on the organization’s long-term success, rather than the CEO’s comfort. It is a delicate balance, and no one should undermine the CEO and each other.
Make sure that the nominating committee drives and sustains a relentless focus on succession planning.
CEO succession planning is not a one-time event. Succession planning is a continuous process. It has to be top-of-mind every single time a candidate is interviewed for an upper-level management role or when the board is expanded or refreshed.
Don’t assume that the board directors, including the CEO, human resources and the general counsel, know how to define and implement a sound succession plan. Within your board’s composition, make sure you have directors who understand talent assessment and talent management and that the people who are members of the nominating committee know how to evaluate and recruit leaders within the Pivotal Leadership TrioTM (PLT – Board, CEO, Executive Team). Minimally the board should have external resources who are experts to help guide the process. Do not blindly delegate the process. Own it within the board.
Start early. Define and agree to a succession process regardless of the names, tenures and success of who is in key leadership roles. Take into consideration all scenarios:
- If the CEO retires, should s/he be considered to remain as Chair? (Will s/he support or undermine the incoming CEO? Who within the board can readily take the lead of the board and how, should conflict arise between the incoming CEO and the Chair?)
- If the CEO chooses to leave unexpectedly
- If the CEO is unavailable due to natural disaster or accident
- If the CEO is confronted with a serious illness
- If the CEO has personal emergency or crisis
- If the CEO’s reputation is threatened due to unhealthy behavior, fraudulent actions, product failure, environmental issues, etc.
Before any of the above can occur, clearly outline the succession plan and process for the CEO to be replaced. Also clearly outline the succession plan and process for the board (a) should the CEO have the dual roles of CEO and Chair of the board and (b) given that the CEO is an executive director at the board table. Depending on the level of influence, experience and skills the current CEO offers, the overall composition of the board should not be overlooked, as it might need to be refreshed to compensate for the potential void of skills, experience and knowledge created by the departure of the CEO—even if a new CEO is recruited.
Put it in writing and designate it “confidential.”
- Describe how the officers of the company are identified, recruited and replaced, given the scenarios outlined above
- Determine who is responsible for leading the succession planning process, contributing to it, reviewing it and amending it and how it is approved and dated as such
- Document the roles of the people involved and their experience
- Review the succession plan and process twice a year—especially following an annual leadership effectiveness assessment of all members of the PLT. It should minimally be reviewed after the leadership assessment.
Don’t procrastinate about making amendments. Approve changes quickly, as something could happen in an instant. Have the relevant bylaws and succession procedures up-to-date.
Succession planning must be forward-looking based on the organization’s anticipated strategic trajectory. Since boards must engage in strategy, and board composition needs to be synced and refreshed appropriately to effectively support the strategy, board directors must understand the strategy to be effective in the succession planning process.
Think about who can effectively lead the company in the years ahead. Who has the right experience, skills and knowledge going forward—not based on where the organization has been? Recruit someone with the track record that is necessary for the future strategic trajectory of the organization. Be mindful not to recruit based on the past accomplishments of the organization, but what the organization needs to accomplish going forward.
Be proactive in leadership development. The board, the CEO and human resources must identify candidates when they recruit them for their ability to be in specific roles of leadership as the organization grows, to ensure that they are exposed to a variety of leadership challenges and experience, and that they have the ability to grow a comprehensive set of skills.
The board and the CEO must know who are the top leaders and what they need to develop as it relates to their interaction with all stakeholders, including the board itself. Know who can and who cannot be eligible to replace and step into a different role when recruiting new leaders and evaluating existing ones.
CEO succession planning is a must – not a “nice to have” process. More than ever, corporate directors are facing growing regulatory and investor pressures to exert more oversight over succession planning.
Succession planning is controllable, and there is no excuse for not getting it done. By the time it is needed, it is too late to address it. Prioritize it as a very important component of good governance.