This past weekend I had the privilege of honoring my parent’s 50th wedding anniversary. It wasn’t some gala or major blowout of a party, but it was small and intimate with a handful of close friends. It was quite festive, albeit in a senior sort of way.
Meanwhile, one of my close family members was with us, and she has a mother who is months away from joining the illustrious centenarian gang.
Both events are, and will be, a success.
Not just “success” in the sense of accomplishment but in the transitive sense that succeeding means yielding to what comes next sequentially and generationally.
Last week, senior reporter Vincent Ryan examined the CFO succession plan process in 2023. Everything moves faster, be it the exchange of information, identification of business needs, and changing perspectives. Everything, that is, except the essential timeline for making plans for your C-suite.
Unlike my great-aunt, whose birthday has been set in stone since the very first Winter Olympic Games were held in Chamonix, France, succession planning can get messy and murky, in part because it is so critical to find the right finance chief to carry on a company’s success. According to Ryan’s story, Russell Reynolds Associates reported some startling statistics:
- Only 24% of CFOs stated they have “formal and proactive succession practices” in their organization;
- 46% have not even been involved in the process at all in the past three years; and
- Only 15% were promoted via the succession planning process in the past three years.
Effective planning can take three to five years for the more proactive organizations, but again, the trends muddy the waters. Average CFO tenure, at least at public companies, is just under five years and, according to research firm Datarails, finance chiefs have the shortest average tenure in the C-suite, at just 3.5 years.
So, it would seem that there is an inherent timing risk that can directly impact the business. It takes 3 to 5 years to properly plan for a CFO’s succession plan to unfold, yet for many companies the average CFO tenure is also somewhere between 3 to 5 years. A company is either starting its succession plan as soon as they hire a new CFO or there is going to be a collision at some point where the company needs a new CFO and the board and CEO will not be prepared to make a good decision.
Here is another number — in 1964, nearly 60 years ago, the Rolling Stones recorded the famous song: “Time Is On My Side.” While lead guitarist Keith Richards is either immortal or looking forward to afternoon tea with Methuselah in the afterlife, the song’s message is about being able to hold fast and wait for the right timing.
But it is not just about you looking forward and waiting for the right opportunity to open up. It is also about what you leave behind, that part of your personal measure of "success" is who "succeeds" after you.