Why a CEO Succession Plan is More Important than you Think (Infographic)

Why a CEO Succession Plan is More Important than you Think (Infographic)

Let’s start this post with a question for you, the CEO/Founder of your company: Do you have a CEO succession plan in place?

Please answer honestly in your heart; chances are, you don’t.  You might have thought about it some moments ago, but you don’t really pen it into a real, actionable plan.

I do hope that you have the plan in place; but if you didn’t, no worries: This post will show you the reasons why you need to create one, pronto.

CEO succession planning

To get started, here’s a stunning fact for you: According to a study, the absence of a CEO succession plan costs large companies $1.8 billion in shareholder value. It’s a hefty cost, I say.

Indeed, such plan is very important. Unfortunately (or fortunately?) more than half of today’s companies can’t immediately name a successor should the current CEO suddenly depart. It’s may be good news for you because reading this, now you know better than most – if you take action, that is!

But then you ask, “What is the benefit of having such plan? Why does it matter?” Well, here’s the stat that may interest you: Big companies that have a CEO succession plan generate $112 billion in additional market value during the transition. That figure, my friend, the ultimate reason why planning for CEO succession matters. It’s that important.

Let’s dig further into the stats from this infographic created by DHR International, a global executive search firm offering personalized service to clients.

CEO succession plan infographic by DHR International

To recap, here are some intriguing stats related to CEO succession planning – along with my commentary:

  • On average, the boards of directors only spend 2 hours annually on SEO succession planning. That’s not enough! You need to spend more time on it.
  • 39 percent of companies have ZERO viable internal candidates, despite the fact that 80 percent of CEOs are promoted from within. Yes, it’s difficult – that’s why you should plan for it.
  • In order to make a successful succession, externally recruited CEOs need to be 1.5 times better than the internally promoted CEOs.
  • 69 percent of respondents believe that a successor needs to be ready for taking the CEO position immediately; however, only 54 percent are grooming an executive for this position. If you want it that bad, plan for it and plan early.
  • New CEO onboarding support is only provided by 50 percent of companies. That’s mind-boggling, given the fact that they need to make a difference ASAP. New CEO learning curve needs to be shortened so that he/she can start making changes immediately.


Having a CEO succession plan in place can protect your company from losing market value. Not only that, executing it properly can boost your market value during the transition.

It’s a foregone conclusion: Have a plan ready, and you’ll see that change or a transition is actually good for the company.

Ivan Widjaya

Ivan Widjaya is the Owner/Editor of Noobpreneur.com, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.