 They call it “the plane-crash scenario”: one minute, your company’s chugging along fine, then bammo: a twist of fate -- not necessarily in an airplane -- knocks the CEO and top executives out of action.
Nobody likes pondering such a prospect — not the partners, not the directors, certainly not the next of kin. Which is all the more reason to put together a well-thought-out plan for keeping your company in business if the unthinkable happens.
Granted, directors and corporate chieftains seldom find themselves facing such a catastrophic loss at the top. Far more likely are the dire consequences that can flow from a CEO’s unforeseen exit to a cardiac ward, say, or the greener pastures of another job.
Whatever the reason, the vacuum still has to be filled. That’s what puts boards and partners who’ve talked about Plan B in a better position than those who leave the question of succession to the whims of chance.
At a minimum, every contingency plan for an emergency CEO strategy should have at least three parts.
The first thing your board or executive body needs to do is agree on the criteria for interim company leadership in the event the top spot needs filling.
Evaluating the available candidate pool is second. Third is settling on a preplanned course of action for the worst-case emergency like the plane-crash scenario or some other catastrophe that causes the loss of other top executives along with the CEO.
When it comes to criteria, specialists warn against a common mistake companies often make: they look at emergency succession simply as a matter of some senior manager or board member picking up the reins.
Filling in the blank with the closest warm body sounds like an easy way out. But it happens to be the wrong way -- companies who take this course run the risk of saddling themselves with talent that’s inexperienced, underqualified, or both.
Instead, look for an interim leader with four or five of the traits that matter most to your company and its stakeholders. Boards often find that industry experience is a must-have characteristic in an executive who’s main job is to be a temporary caretaker.
If nothing else, experience brings credibility in the eyes of stakeholders and competitors who’ll be looking for ways to press their advantage against your company in its time of weakness.
Remember, too, that the ideal candidate to take over during an emergency may not be the right choice for an orderly succession. And don’t be afraid to change plans if circumstances call for it.
Keep your emergency-CEO succession-plan close to the vest. This helps you avoid the pitfalls of creating unrealistic expectations on the part of whoever is identified as the emergency successor most likely to guide the company through a rough patch.
Better yet, check with Phasecorp for help putting together your five-point emergency CEO plan. It’s the best insurance you can have against the worst-case scenarios that can derail the best of intentions at the most-critical time of change in a company’s life cycle. For more information, call Emergency CEO at Phasecorp, 1-877-283-9780
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