Who’s Your Successor?

Clearing the Mystery behind Succession Planning in the Arab World

Is Succession Planning a taboo? Many would argue that, in our part of the world, it is. Raising the issue of Succession is pretty much seen as if you are throwing a death spell on the founding father or on the current leader of the organization. This is significantly impactful especially in Economies where more than 80% of the Companies are Family Businesses.

Facing the truth in this matter does not seem to be an easy mission, as it has to do with changing mentalities on one side, and setting up required enablers inside organizations on the other. This, in turn, is necessarily linked with the need to build extensive awareness about this issue among business leaders and HR Professionals.

The question of Succession Planning arises as a result of the natural dynamic of all living beings, namely aging. When Companies are established, this topic is never on the radar screen of founders. When Companies mature and are successful, the question of sustaining success continues to be weakly tackled under the assumption that Victory lasts forever. When everybody starts noticing the effect of old age on the founder they still shy away from talking about Succession because it is insensitive! The next thing we are talking about is ‘a leadership gap’!

However, this is not the whole story. There seems to be a universal stereotype that Succession Planning is an activity that touches on finding and preparing successors for founding fathers and CEO only. Not true! More too often, the ‘technical expertise gap’ or the ‘institutional knowledge gap’ created by a subject matter expert who leaves the Company can be more impactful on the bottom line of the Company than the ‘leadership gap’.

In this discourse, we will clarify several ambiguities about Succession Planning in Arab Businesses and how to integrate such a practice into their strategies.

It is not a Family matter

Many of us are used to hear about Succession Planning within a Family Business context, and this is due to two main reasons: First, and as mentioned above, we live in a region where the economy is mostly controlled by Family Businesses of all types and sizes. Second, it is stereotypically acknowledged that only Family rather than incorporated Businesses should be worried about Succession.

True as it may seem, yet, Succession Planning is not only a Family matter. In fact, Corporations should be more worried about Succession Planning than Family Businesses because they are under the direct scrutiny of their shareholders; this is even more serious when the Company is publicly traded!

It is generally known that only 1 in 5 Family Businesses live to be run by the third generation. This is pretty much caused by absence of Succession Planning and clear governance. Yet, this, at the end of the day, remains a Family matter. Family members might intentionally decide to dissolve the company or sell it. On the other side, however, this is not the case. In the Corporate world there is a lot at stake. Many shareholders had invested their money in the Business. Investments are mostly long term oriented, and accordingly, people expect companies to live long and prosper so that they get their investment and its returns back. Not only that, but Corporate Longevity, which is a factor highly dependent on availability of Succession Planning, is a major factor along with agility and resilience that are highly regarded during Valuation exercises. As so, Succession Planning is not to be considered only a Family matter anymore.

It is not a Leadership Business

Although the majority of Companies in this part of the world are not actively involved in Succession Planning, many of those who know about or even practice it consider that Succession Planning is a Leadership Business; set by Company leaders to ensure leadership continuity. In fact, this is only part of the Succession Planning operation. Succession Planning is normally foreseen at four levels in the organization:

  1. CEO and Senior Management (C-Suite) Succession: this is simply the Succession Plan set to ensure the availability of a successor for the CEO and the other Chief Officers in the Company.
  2. Middle Management Succession: at this level Succession Plans are developed for heads of divisions and departments in both Core Business and in Support Units.
  3. Critical Positions Succession: this type of Succession Planning is aimed for specific non-managerial positions in the Company where the business cannot afford having a vacancy for more than 24 hours.
  4. Critical Employees Succession: Succession Planning at this point is set for specific non-managerial employees whose absence can have a critical impact on bottom line performance, profit and cost. This includes employees who have access and can manipulate information, employees who are highly specialized and whose skills are rare to find, employees who stand for the institutional memory and who know historical facts nobody else in the Company knows, etc.

Within this framework, it is obvious that any Succession Planning efforts would not be complete and would not secure enough safety for the Business if it is not part of a comprehensive initiative for Succession.

Successor: Not necessarily a Family Member or an Insider

Not to generalize, but the majority of Companies that consider implementing Succession Planning are faced with a self-impediment that weakens the case of Succession. We will tag this impediment as “The Insider Complex”. This complex represents the focus of most companies to find a successor from inside the Company or from inside the Family (in case of a Family Business).

Of course this aspiration does not turn into an impediment until the current senior leadership realizes that none of the current Family members or senior executives will be fit as a successor. Here, it is also noteworthy that the same logic applies for all the above four levels of Succession Planning. Accordingly, many business leaders become confused when they recognize this reality. How can the successor not be an insider? This cannot happen!

Well, unfortunately in this case there are not a lot of options. If no insider is fit for a successor position, the Company can either get an outsider and nurture him/her for sometime (before appointment), or run the risk of having vacant leadership and critical positions, or start considering the selling option. Yes, the issue of Succession Planning is that important as it has to do directly with Business Continuity.

Institutionalization is a Must

Succession Planning won’t function appropriately unless it is brought up in a supportive hosting environment. In other words, Succession Planning requires major institutionalization efforts by Companies that are planning to implement it; but why?

As per the first statement in this article, Succession Planning is considered a taboo by many; still, it is a highly sensitive political matter for many others. People, and specifically senior executives, tend to have negative feelings towards Succession Planning. It is a subject that resembles the end of the journey especially if you are above 50! Further, even non-executive professionals – middle managers, people who hold critical positions and critical employees – tend to feel the heat when the issue of Succession is raised. Those tend to react negatively to Succession Planning because they believe the Company is preparing to replace them – for cost, performance, or any other reasons.

Reflecting on the above, it is inevitable that Succession Planning needs to be executed only within an institutionalized context, else it will face significant resistance from the same people for whom it is being planned. Above all, Transparency, clearly communicated Succession Planning process, and involvement of concerned stakeholders are required to secure the credibility that is badly needed to sustain Succession Planning efforts.

The time is still right!

Succession Planning is a time sensitive process. It has to be initiated at the right stage of the Organization’s life in order for it to be optimal and the reason for this is that Successors cannot be prepared overnight. Grooming Successors, regardless if they are Family members, current staff or new joiners, is a very delicate matter that demands extensive assessment, synchronization, monitoring and adjustment.

The process of having the appropriate Successor in place, in most of the cases, goes through three main steps before the Successor’s Appointment.

– Step 1: Selection of the Successor

– Step 2: Grooming

– Step 3: Setting the ground and communicating about the Successor

Completing the above steps requires at least 3 to 5 years of preparation at both the Successor and the Succeeded level, this in addition to the profound preparations that need to be done at the Company level. In this respect, it is important to note that these preparation efforts need to take into consideration key issues related to governance, transition of authority, legal matters, and others.

Where to Start?

Conviction is always a key starting point. If the above is credible, then no time should be wasted. Succession Planning requires several essential steps:

First, a procedure that describes how the selection, development, and appointment of Successors is done, should be put in place, along with a clear communication plan. Mostly, the process would be straight forward at lower organizational levels, like Successors’ preparation for Critical Positions and Critical Employees (non-managerial staff), and would grow more complex as you go up the Organizational levels. Further, a comprehensive Assessment Center that assists the Company measure competencies and plan development actions for selected Successors would also need to be established.

Second, communicate to all staff that a Succession Planning procedure will be implemented and explain to them how this will be driven, what’s in it for them, and how this new process will affect their life at the Company. This communication process is very delicate as it marks the level of credibility secured for the Succession Planning process. If employees do not buy into the process, the Company will witness significant resistance in implementing it. This includes resistance from senior managerial staff as well.

Third, make sure to distribute the responsibility of Succession Planning between the HR Department and the Board. The HR Department would take care of implementing Succession Planning at Middle Management level and below, i.e. for Critical Positions and Critical Employees as well. By the same token, the Board would take care of Succession at the Senior Management, C-Suite and CEO level. Of course, the HR Department should be in charge of managing the Assessment Center for all levels or as deemed appropriate by the Board (especially when it comes to confidentiality associated with high level Succession Plans).

Fourth, secure a quick win! Establish concrete Succession Plans for specific positions and communicate about them to the company. Make sure not to lose momentum. Many Succession Planning efforts fail because they were properly launched yet not properly sustained. People need to hear about a colleague for whom a Succession Plan was set and that this Succession Plan was implemented. Credibility, like in any other process, is imperative for Succession Planning to survive.

This said the mystery of Succession Planning is cleared. Now, implementing it in the realm of Arab Businesses continues to be a matter of awareness, of conviction, and of action. This by far demands a concrete partnership between the Board, the CEO, and the HR Department. Otherwise, Succession Planning will remain nothing but a taboo!


Charles S. Saliba
Positive Thinker
Organizational, Leadership & HR Expert