What do you do when your top talent calls it quits?
Is it better to immediately usher in a successor, whom you've groomed and had waiting in the wings? Or to let the competition for the position run its course?
Whatever your process for finding a replacement, business experts warn, don't be caught without a succession plan.
In recent weeks, contrasting succession-planning methods have played out in the public eye with the retirement announcements of long-time CNN interview host Larry King and CTV news anchor Lloyd Robertson.
Since Mr. King announced last month that he will retire from his program Larry King Live this fall, pundits have speculated on a fierce and perhaps drawn-out battle for his position among a number of television personalities, including Ryan Seacrest, Katie Couric, Piers Morgan, Jeff Probst and Joy Behar.
Taking a much different approach, CTV pre-empted any guesswork by naming Lisa LaFlamme, who has regularly filled in for Mr. Robertson, as his replacement nearly a year before he plans to retire.
As much of a scramble as CNN's approach might seem, a public horse race allows contenders to build a support base, says Stewart Thornhill, director of the Pierre L. Morrissette Institute for Entrepreneurship at the Richard Ivey School of Business. He notes that many large organizations select successors for their top executives in a process almost like a presidential campaign, with rivals meeting and greeting various stakeholders.
"One positive outcome of that is lots of people have an input into who ends up being the successor," Mr. Thornhill says, noting that such a rigorous process helps identify the strongest candidate.
The tradeoff, however, is that the losers of such competitions almost never stay with the company.
"They were set up aspotentially the next CEO, and neither the winner nor they themselves want them around now that they're not the winner," he says. "So what you've done is you may have taken four or five of your best executives and lost them because of the nature of the competition."
Jacque Small, president of Catalyst Business Coaching in Vancouver, recommends that companies groom more than one potential successor for key positions to keep their options open.
Besides, she says, "when you groom somebody, that person might actually choose to leave and go somewhere else before the top spot becomes open."
Also, an early pick may wind up being unfit for the job.
Once a retirement or job opening is announced, however, it's best to settle the succession issue quickly to ease everyone's minds and allow for a smoother transition, Ms. Small says.
"What happens is you get rid of all the speculative energy that goes on. People love certainty," she says, noting that a swift decision also cuts down on misspent time and energy wondering what's to come.
In her own experiences working in the corporate world, "all of us spent a huge amount of time talking about the change that was coming down" before every organizational change, she says. "And because we spent all of that time talking about the change that was coming down, I guarantee you we weren't working. I guarantee you there were thousands of hours lost."
Cheryl Stein of Montreal's Stein Coaching & Consulting says succession planning isn't just about who is the best candidate for the position. The decision also hinges on the direction the company wants to go.
That means a company might not want to choose someone who follows their predecessor to the letter. In fact, Mr. Thornhill says, such expectations usually set successors up for failure.
"The rule of thumb … is if you're really, really serious about succession, try to find somebody who's better than you are. Then it's succession planning. If all you're doing is finding someone to replace yourself, then it's replacement planning," he says.
Ms. Stein says transparency around the selection process is key to a smooth transition.
"When people don't understand the criteria, when they don't understand the decision, they're much less likely to buy into that decision," she says.
And importantly, she adds, it takes a good six months to a year before people get used to the new replacement. So it's best to give a break to whoever winds up taking Mr. King's place.
"You can't just step into someone else's shoes," Ms. Stein says. "You have to not expect too much too soon. You have to give people a chance to find their groove."