It seems the American Management Association is on to something here.

Sudden Leader Loss Leaves Firms in Limbo

Wall Street Journal (01/24/11) Light, Joe

More than 20 percent of senior managers say their companies are “not at all prepared” for the sudden loss of a key member of the company’s senior management team, according to a newly released December survey of 1,098 senior managers by the American Management Association. “For the last few years, companies have been in survival mode and losing sight of the things they need for the future,” says Sandi Edwards, a senior vice president at AMA. As the stock market comes back, companies may have to face more retirements by senior executives who stayed on due to the severe hit their retirement savings took during the recession. About 39 percent of managers surveyed said their own company’s leadership pipeline is inadequate, compared to only 10 percent who described it as “robust.” David Larcker, professor at Stanford Graduate School of Business, says firms often acknowledge that leadership development is important but rarely back that up with action. He notes that compensation programs, for example, rarely factor in how well the manager has planned for his own succession. Larcker adds that even when a succession plan is in place, some companies find they are not really committed to it when it comes time to replace a leader. “You need to make sure people believe in the plan. You don’t want to go months without senior leadership,” he says. According to the AMA survey, about 34 percent of managers said senior management often ignores the management-succession plan and recruits from the outside instead

Only 10% of firms say their pipeline looks full. What would you say? If you don’t say full, what is the plan to fill it? We can help….

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