Nov 01 CEO Succession Planning: How to Prepare for Leadership Transitions
CEO turnover reached record levels in the first half of 2025, marking the highest first-half total since Challenger, Gray & Christmas began tracking the data in 2002.
Leadership change at this scale creates real consequences. Without a clear plan in place, executive exits can stall strategic initiatives and raise doubts among employees, investors, and partners. The absence of preparation is often felt across every layer of the organization.
In fact, poor CEO succession planning costs public companies an estimated $1 trillion in market value each year. By contrast, companies with strong plans in place tend to see 20 to 25% higher investor returns.
Proactive CEO succession planning gives your organization the structure to navigate transitions with control. By identifying future leaders early, aligning decision-makers, and supporting development through executive coaching, you can maintain stability, protect brand perception, and build long-term leadership strength.
Key takeaways
- Record CEO turnover highlights the urgency of planning for leadership transitions to ensure business continuity.
- Effective succession planning requires early alignment, regular evaluation of internal talent, and preparation well ahead of executive exits.
- Executive coaching turns high-potential employees into capable, confident leaders.
Succession planning can’t be an afterthought
Leadership shifts test an organization’s ability to stay on course. Disruption can hinder progress toward strategic goals and strain team cohesion and performance. Without a succession management plan to guide the process, the impact is even greater.
When a CEO or other senior leader departs unexpectedly, or even as part of a planned transition, the absence of a clear succession strategy can create confusion at the top and ripple instability throughout the organization. Investors may question the company’s direction, while key decisions stall and employees are left wondering what’s to come, creating a sense of uncertainty. The longer it takes to fill the gap with a trusted, capable leader, the harder it is to sustain momentum toward key business objectives.
Proactive succession planning helps address that uncertainty. Ownership of the plan typically falls to HR and the board in partnership, with the current CEO’s input when possible. They define leadership criteria, identify successors, and align on development goals in close coordination.
Whether the successor comes from inside or outside the organization, the transition is smoother when there’s a playbook at the ready. Most companies keep the plan private, but transparency with key internal stakeholders, especially those being developed for future roles, can help maintain engagement and trust.
A succession plan should also outline interim leadership plans until a permanent hire is made. Identifying who can step in temporarily, and under what circumstances, ensures the business remains stable and decisive even during periods of flux. Interim leaders can’t replace long-term strategy, but they can safeguard day-to-day operations and give your organization the breathing room it needs to make the right long-term choice.
5 best practices to strengthen CEO succession strategies
Leadership changes are inevitable, but they don’t have to be destabilizing. A strong succession strategy prepares your organization for CEO turnover and other senior leadership transitions by building continuity and confidence into every step of the process.
1. Align HR and board priorities early
Start by creating a shared understanding of what future leadership should look like. The board can define long-term business goals and external expectations, while HR brings deep insight into culture and internal capabilities. Together, you can set leadership criteria that reflect both where the business is today and where it’s headed.
This alignment makes succession planning proactive, not reactive. It also helps you evaluate candidates through a consistent lens and avoid scrambling when change happens.
2. Identify and evaluate internal talent consistently
Don’t wait for an open role to think about potential successors. For CEO succession planning, the candidates you’re considering will already hold senior leadership titles, but not every executive is ready for the top job. Focus on those who demonstrate strategic thinking, adaptability, and the ability to lead through ambiguity.
A structured scorecard can help evaluate potential successors against consistent criteria aligned with your business strategy and culture. When you assess talent regularly and intentionally, you can focus development efforts where they’ll have the most impact.
It’s also important to support those not chosen with clear development paths and new stretch opportunities, positioning them for future roles and reinforcing that they remain valuable members of the leadership pipeline.
3. Invest in executive coaching to accelerate readiness
Even the most capable internal candidates need support to step confidently into executive roles. Executive coaching gives them a space to refine decision-making, strengthen communication, and develop the executive presence needed at the top.
Focused, one-on-one development bolsters your internal bench by preparing high-potential employees for greater responsibility. At the same time, coaching demonstrates a clear commitment to future leaders and reinforces their potential within the organization.
4. Create development opportunities that mimic real challenges
Executive decision-making requires experience in high-pressure, high-impact situations. Give your high-potential talent opportunities to lead across functions, manage major initiatives, and represent the organization externally.
These experiences build judgment and confidence while giving the organization meaningful insight into whether internal candidates are truly ready to take the next step. Pairing these opportunities with development plans makes growth more intentional and trackable. Use those plans to monitor progress over time, spot gaps, and help candidates stay on leadership growth.
5. Revisit and refine plans regularly
Your business evolves, and so should your succession plan. Schedule regular stakeholder check-ins to review which leadership roles are most critical to the company’s future, confirm whether current successor candidates are still the right fit, and ensure the plan aligns with your latest strategic priorities.
Keeping your plan active ensures that when leadership changes do occur, you’re not starting from scratch. Instead, you’re activating a leadership continuity plan that’s already been tested, updated, and aligned across decision-makers.
CEO succession planning strengthens leadership before change arrives
CEO turnover is rising, and the way you prepare for leadership change will shape how your organization moves forward and leads with confidence during periods of transition.
When you invest in leadership development and support your talent with executive coaching, you strengthen your internal bench and reduce the uncertainty that often comes with executive exits. You also reinforce brand perception by showing employees, partners, and stakeholders that your organization is built for sustained success.
Get in touch to learn how our executive coaching services can help you prepare your organization’s next generation of leaders.