Personal Finance

Succession plans cushion businesses from disputes

pass on the baton
Business leaders and owners should plan well to pass on the baton to the next generation after they die. PHOTO | FOTOSEARCH 

It is exactly one week since the unfortunate death of Safaricom chief executive Bob Collymore. After this demise, the company has appointed its former chief executive Michael Joseph on an interim basis. A few years ago Apple Inc. had to face a succession issue when After Steve Jobs died. Tim Cooks replaced the late Apple co-founder and CEO.

I trust that Safaricom has in place a proper succession plan to ensure that there will be no leadership crisis or wrangles after the passing of its former CEO. In the case of Apple, Jobs had identified a successor — Cooks — and began the mentorship early enough even before his death. Corporate succession planning is an exercise that all businesses should undertake. It helps ensure the company’s survival long after the death of its leaders.

Corporate succession planning is necessary when the top leader suddenly dies or exits for any other reason. This is especially so where the company’s identity is strongly linked to its leader, especially if one is the founder of the business.

Such enterprises need succession planning so as to delink the founder’s identity from the business after the leader is deceased. Safaricom’s case is slightly different in that, the company is listed and as such it has many owners. Who then would appoint the new CEO? It depends on what the company’s governing instruments provide. However, in most cases, the board of directors make the appointments.

The succession can be internal or external. Internal succession is done by promoting existing staff to take on the leadership position. External succession happens when the company hires the CEO from outside the organisation. The board are then accountable to the shareholders for any decisions made.


A good corporate succession plan enables a business to maintain its corporate identity.

Corporate succession planning ought to begin at the foundation and formation of a new business.

A succession plan is not only necessary for leadership but it also cuts across the organisation.

A succession plan highlights the human resource need of the company and contains a bit of talent management. For example, the company would highlight the kind of person it requires to succeed in the current positions.

Possible candidates are identified and groomed early enough.

In some cases, it is better to inform the staff of the possible successor. In other cases, it may not be wise to state the possible successor as this may create conflicts.

Corporate succession planning is also important during recruitment processes. The hiring process should be such that the recruiters consider candidates who fit in with the identity and purpose of the business. For example, if you have a strong innovative culture, it is important to look out for that value and skill in candidates at all levels.

A mistake that some businesses make is to recruit persons based on academic qualifications alone or work experience. It is important to highly score compatibility.

Employee incompatibility with organisational goals can slow down business growth.

During succession pick compatible employees into leadership. These can be entrusted to maintain the corporate identity faithfully until the next generation.

Staff training is a great opportunity to embed the agenda of corporate identity. Some businesses are so serious about their identity that they demand that their staff dress in a certain way so as to uphold business identity.