Significance of Succession Planning

The long-term success of any organization depends primarily on the quality of people who assume its leadership positions. Yet, for many organizations, the process by which people are developed, identified, and selected for top management roles is relatively unplanned and, in large part, undescribed.
Only a few aerospace companies have a well-developed formal succession plan for the purpose of operating efficiently in the future. One of the companies engaged in aerospace that has developed a workable succession plan is General Electric. Unlike other companies in the aerospace industry, General Electric has consistently been applauded for having one of the most outstanding succession planning programs in the industry. General Electric does not stand in complete isolation as a company that takes pride in developing employees for management continuity. Over the years a few companies have consistently stood out in their ability to plan for management succession.
Among them are International Business Machines, Procter and Gamble, Mobil, General Motors, DuPont, and Exxon. With the exception of General Electric, the names of aerospace companies are noticeably absent when listing companies that practice formal succession planning. However, such leading aerospace companies as TRW, Rockwell, Northrop and McDonnell Douglas as well as others are starting to initiate succession plans which are in various stages of development.
Aerospace companies are starting to realize that all too often large companies make the mistake of thinking they can find the best people in the organization whenever the need arises for management talent. Unfortunately, efforts to do so have been met with numerous obstacles resulting in costly mistakes and/or contracting with expensive search firms. Large companies that practice succession planning engage the services of search firms sparingly, if at all because they generate their own talent pools. Board members are beginning to admit that they are not aware of management continuity practices. To compensate for this deficiency, boards are starting to appoint succession committees. One out of four major corporations now have boards with standing succession committees.

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