A study by USA-based HR consultancy DDI, which specialises in management development has found that given the chance, only 62 percent of organisations would re-appoint their current managers.

If this is the case, it suggests that companies will be looking for a successor with different skills and competencies, but the report from the DDI suggests that it's unlikely they have considered this. The survey of 260 companies found that only half of them have formal plans in place for managing succession, despite the fact that if an organisation's chief executive leaves and is not immediately replaced, it can have big repercussions for the company (BA and Thomson Holidays are cases in point). Speaking in the Times, Andre Main Wilson, managing director of the Institute of Directors, says that "if a company has no plan for the future it loses the respect of staff, shareholders and customers".

Furthermore, the DDI survey found that organisations who did have plans in place for several levels of the organisation reported a much greater improvement in employee satisfaction and retention.

The case for succession planning having been soundly made, the report also finds that changes are afoot in the traditionally closed world of choosing a successor to the MD. Succession planning is becoming less of a secretive process, where only the top executives in the organisation knew what was happening, and is becoming more inclusive, involving better planning and development and a greater number of staff in making the decisions. In addition, the selection process is likely to move away from using data from past performance alone to using job simulation and gathering information from a number of different sources. It is also vital to involve HR in the process, as it fits closely with other HR operations and responsibilities.

Of those that currently use formal succession planning, the majority link succession planning to training and management development programmes, and 90 percent also link succession planning to performance management and career planning. Mentoring and coaching is however only used in 68 percent of organisations surveyed.

A recent article in the Times questioned whether succession planning should be used at all, due to the speed of change in many workplaces, but some companies have responded to this with planning which reflects a more flexible approach -Vodaphone AirTouch aims to have a pool of potential candidates who are both highly skilled, flexible and experienced in challenging roles within the organisation.

http://www.succession-planning.com/index.html has some useful further reading, including a flowchart for putting a procedure in place.