Continuity Planning When the Succession Candidate Is Not Ready
A regional logistics firm's Chief Operating Officer has announced retirement in 90 days for family reasons. The board's continuity plan named the VP of Operations, Dana, as successor, but Dana has led only one business unit and has never owned enterprise-wide P&L or regulatory filings. The CEO wants to appoint Dana immediately to avoid a vacuum. The board chair notes the plan also lists an external interim option and requires a competency gap assessment before any appointment. Two large customers have asked who will sign their contracts next quarter. The CHRO has a skills matrix showing Dana meets 6 of 11 executive competencies, with gaps in capital allocation, regulatory reporting, and enterprise risk.
1. What should the board recommend regarding Dana's appointment, and why?
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The board should reject an immediate permanent appointment and instead authorize a structured interim arrangement. Reasoning: the continuity plan itself conditions succession on a competency gap assessment, which shows Dana meets only 6 of 11 competencies. Appointing Dana now would skip the plan's own controls and expose the firm to unmanaged risk in capital allocation, regulatory reporting, and enterprise risk during a period when two major customers need contractual certainty.
A defensible path: appoint the named external interim COO for 6-12 months, keep Dana as a designated successor with a written development plan covering the three gap areas, assign a board mentor, and set a reassessment date. This preserves customer confidence because a credible signatory is named, respects plan governance, and gives Dana a realistic runway. The board should document the decision and the reassessment criteria so the choice is defensible to regulators and shareholders.
2. How should the CEO communicate with the two concerned customers in the next 30 days?
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Communication should be proactive, specific, and consistent across both customers. The CEO should schedule calls within two weeks, name the interim COO as the contract signatory, confirm that existing commitments and service levels are unchanged, and introduce Dana as the long-term operational lead. Avoid implying instability; frame it as planned leadership transition with continuity of authority.
Supporting actions: provide a short written confirmation of signatory authority, designate a single account contact, and set a check-in at 60 days. The CEO should also brief the board chair before the calls so messaging is aligned. This addresses the customers' actual question (who signs) while protecting the relationship and buying time for Dana's development.