Executive Succession Series: Failing to plan is planning to fail - Part 1
Debbie Morrison • February 8, 2022

There has been much fanfare about the impending ‘great resignation’ expected this year. How much this impacts Australian organisations, especially the c-suite remains to be seen. It’s not unrealistic, however, to think many executives, burnt out from the unprecedented difficulties faced as a result of the pandemic may consider calling time on their reign this year, potentially leaving many organisations exposed at the top. 


The impact of CEO performance and organisational success has long been observed and there is no denying there is a direct correlation. Since the 1980s, researchers have found that CEOs could influence changes to a company’s stock price. By the 2000s, a study by
John Wiley & Sons, Ltd among others, found the effect of CEOs on profitability was as much as 15%. More recently, research has focused on firm value (using Tobin’s Q), estimating that CEOs are responsible for at least 25% of a company’s market value. 


There’s no doubt succession planning should be a priority for any organisation. Yet, research has found that most organisations are unprepared and have little understanding of how to approach succession planning properly. It’s not surprising that organisations who fail to prepare and plan accordingly risk excessive turnover at the top and can destroy a significant amount of company value. 


Perhaps the biggest cost is underperformance. Poorly suited external hires can result in the loss of intellectual capital but the dangers run deeper and have far broader implications. According to
MicKinsey 46% of leaders underperform during their transition to a new role. Furthermore, 50% of leaders reported that it took them six months to become effective in their new roles. 20% of C-Suite Executives stated it took more than nine months to become effective according to a survey by Egon Zehnder.


Poor preparations and a lack of support for new executive appointments can have a negative impact on overall company performance but the impact is also felt among teams and employees. Direct reports perform 15% worse under a struggling leader and are significantly more likely to become disengaged, a study by
McKinsey found. These harrowing statistics highlight the importance of succession planning. For business success in 2022, organisations must do better. The solution is simple; companies must start succession planning well before they think they need to. 

 

Where are organisations getting succession planning wrong?

According to a CEO succession study by Stanford University, one of the reasons organisations fail at succession planning is because they don't devote sufficient time to it. The study found boards of directors spend on average 1.14 hours discussing it. This lack of preparation and forward planning puts companies on the back foot, often leaving them with little choice but to rely on those external hires or internal candidates available at the time. This band-aid approach is hardly conducive to business success especially considering the direct cost of replacing a failed executive is close to 10x his or her salary according to a study by Heidrick & Struggles.


As Australia is plunged back into uncertainty with record levels of infections of the Omicron variant, the importance of resilient leadership cannot be overstated. It’s unsurprising that 74% of Boards are making emergency plans in case of a sudden CEO departure according to the
Governance Challenges 2019: CEO Succession report.



CEO succession planning is crucial to company stability, empowering employee trust and investment in the long-term but success requires a shift in thinking and approach. Succession planning needs to be an ongoing process rather than a contingency plan. Even then, it can often be as much art as science. Talent pools and internal candidates earmarked and groomed for succession can often be headhunted or resign unexpectedly, leaving gaping holes in the hopes of boards. Research by McKinsey in recent years highlights that
nearly half of all leadership transitions fail.


Whilst this statistic may sound concerning, it is not always a reflection of a poor transition. Changes in strategic direction or aggressive innovation can lead to a reshuffle. Succession planning can be complex, delicate and subject to any number of variables. Even the most extensive succession planning processes, invested CHROs and skilled executive search firms could struggle to find a high-calibre replacement. As such, it’s important to give thought to the pitfalls that can arise when succession planning is not treated as an ongoing initiative. 

Here are 8 of the potential dangers to avoid:



Lack of reliable succession-plan

Surprisingly, whilst 86% of leaders believe leadership succession planning is of the utmost importance, only 14% think their organisation does it well according to Deloitte. Many organisations still lack the tools and necessary processes to conduct worthwhile succession planning, according to a 2018 Deloitte study. Alarmingly, only 35% of organisations have a formalised succession planning process according to ATD’s research report Succession Planning: Ensuring Continued Excellence with SMBs and scale-up businesses not yet considering succession planning as a necessity yet.


Short term, reactive thinking

For many organisations, succession planning is often only a priority when an executive is exiting or planning to exit the business. Effective succession planning is a continuous process, requiring ongoing focus and review. The development of internal candidates requires long-term planning and investment. The alternative is a band-aid solution or external hire, neither of which helps to retain commercial IP.


Poorly handled discussions

Succession planning, by its very nature, can be a destabilising process if poorly managed. Executive transitions are typically high-stakes, high-tension events. Naturally, leaders that are under pressure or even those performing well might be hesitant about having succession planning discussions for obvious reasons. However, succession planning is exactly that; planning. It’s about safeguarding the future of an organisation and an important part of board responsibility. This can only come from ongoing discussions, development and planning to ensure that whatever decisions boards make regarding future executive leadership comes as a surprise to nobody.



Insufficient information or access to internal candidates

Impartial screening and selection of potential candidates cannot be conducted without the proper structure and processes in place. Naturally, executives will be reluctant to concede their position. Heavy reliance on the opinion and thoughts of the incumbent executive when planning for succession invites bias into the process, which may lead to poor decision making and negative outcomes. Boards can ensure they receive the right information and access to the best possible potential successors by actively talent pooling the market or engaging a specialist executive search firm to conduct a thorough executive assessment and talent mapping process



Managing internal candidates

Every organisation wants a promising pool of talented internal candidates for c-suite roles. Good succession planning is as much about the retention of high-calibre talent as it is about executive assessment. Organisations need to focus on retaining potential candidates through well-considered financial incentives, career planning and professional development. Ambitious leaders seeking executive roles will find them elsewhere if structured career paths are not created and presented.



Transparent, competitive selection processes

Boards risk making poor executive appointments if they approach the selection process with a closed mind and biased outlook. Quality succession planning goes beyond skill matching and assessment for cultural fit. Clear and open dialogue around leadership potential, the quality of thinking and objective assessment enables organisations to make informed decisions.


Using the right resources

Whilst the use of executive search firms can be costly, organisations need to consider the costs associated with making a poor hire. Good executive appointments are the result of adequate investment in time and resources to what can be a lengthy, complicated process. Given the immense significance of executive selection on business performance, extensive review of internal and external candidates, independent advice and a wider search of domestic and international candidates are important steps in securing the right leadership.


Internal vs External Candidates

Given the opportunity, it stands to reason that most organisations would prefer to source prominent executive appointments through internal candidates rather than external hires. Whilst both have pros and cons, it is difficult to arrive at an informed decision without conducting a proper selection and assessment process. The merits of new perspectives or differing skills versus organisational IP cannot be properly ascertained without first engaging in the appropriate success planning discussions and processes.


How ELR Can Help

Decades of expertise and insights derived from the assessment of countless executive candidates enable us to craft flexible, forward-thinking succession plans that identify the most suitable talent for a myriad of executive positions in the FMCG sector.


We help organisations identify, assess and screen the talent best suited to future leadership positions based on your business’s unique requirements. Their skills and expertise are also benchmarked against the FMCG leadership talent pool, ensuring you have a structured succession plan and career development program to cultivate the best performers.


If you’re interested in understanding how we can help develop a talent pool of future leaders, you can arrange a confidential discussion with one of our experts today by clicking this link '
chat'.

By John Elliott June 26, 2025
You don’t hear about it on the nightly news. There’s no breaking story. No panic. No protests. Just rows of vegetables being pulled out of the ground with no plan to replant. Just farmers who no longer believe there’s a future for them here. Just quiet decisions — to sell, to walk away, to stop. And if you ask around the industry, they’ll tell you the same thing: It’s not just one bad season. It’s a slow death by a thousand margins. 1 in 3 growers are preparing to leaveIn September 2024, AUSVEG released a national sentiment report with a statistic that should have set off alarms in every capital city: 34% of Australian vegetable growers were considering exiting the industry in the next 12 months. Another one-third said they’d leave if offered a fair price for their farm. Source: AUSVEG Industry Sentiment Report 2024 (PDF) These aren’t abstract hypotheticals. These are real decisions, already in motion. For many, it’s not about profitability anymore, it’s about survival. This isn’t burnout. It’s entrapment. Behind the numbers are people whose entire identity is tied to a profession that no longer feeds them. Many are asset-rich but cash-poor. They own the land. But the land owns them back. Selling means walking away from decades of history. Staying means bleeding capital, month by month, in a system where working harder delivers less. Every year, input costs rise, fuel, fertiliser, compliance. But the farmgate price doesn’t move. Or worse, it drops. Retail World Magazine reports that even though national vegetable production increased 3% in 2023–24, the total farmgate value fell by $140 million. Growers produced more and earned less. That’s not a market. That’s a trap. What no one wants to say aloud The truth is this: many growers are only staying because they can’t leave. If you’re deep in debt, if your farm is tied to multi-generational ownership, if you’ve invested everything in equipment, infrastructure, or land access, walking away isn’t easy. It’s a last resort. So instead, you stay. You cut your hours. Delay maintenance. Avoid upgrades. Cancel the next round of planting. You wait for something to shift, interest rates, weather, prices and you pretend that waiting is strategy. According to the latest fruitnet.com survey, over 50% of vegetable growers say they’re financially worse off than a year ago. And nearly 40% expect conditions to deteriorate further. This isn’t about optimism or resilience. It’s about dignity and the quiet erosion of it. Supermarkets won’t save them, and they never planned to In the current model, supermarket pricing doesn’t reflect real-world farm economics. Retailers demand year-round consistency, aesthetic perfection, and lower prices. They don’t absorb rising input costs, they externalise them. They offer promotions funded not by their marketing budgets, but by the growers’ margins. Farmers take the risk. Retailers take the profit. And because the power imbalance is so deeply entrenched, there’s no real negotiation, just quiet coercion dressed up as "category planning." Let’s talk about what’s actually broken This isn’t just a market failure. It’s a policy failure. Australia’s horticulture system has been built on: Decades of deregulated wholesale markets Lack of collective bargaining power for growers Retailer consolidation that has created a virtual duopoly Export-focused incentives that bypass smaller domestic producers There’s no meaningful floor price for key produce lines. No national enforcement of fair dealing. No public database that links supermarket shelf price to farmgate return. Which means growers, like James, can be driven into loss-making supply contracts without ever seeing the true economics of their product downstream. But the real silence? It’s from consumers. Here’s what no one wants to admit: We say we care about “buying local.” We say we value the farmer’s role. We share those viral posts about strawberries going unsold or milk prices being unfair. And then we complain about a $4 lettuce. We opt for the cheapest bag of carrots. We walk past the "imperfect" produce bin. We frown at the cost of organic and click “Add to Cart” on whatever’s half price. We’re not just bystanders. We’re part of the equation. What happens when the growers go? At first, very little. Supermarkets will find substitutes. Importers will fill gaps. Large agribusinesses will expand into spaces vacated by smaller players. Prices will stay low, until they don’t. But over time, we’ll notice: Produce that travels further and lasts less. Fewer independent growers at farmer’s markets. Entire regions losing their growing identity. National food security becoming a campaign promise instead of a reality. And when the climate throws something serious at us, drought, flood, global supply shock, we’ll realise how little resilience we’ve preserved. So what do we do? We start by telling the truth. Australia is not food secure. Not if 1 in 3 growers are planning to exit. The market isn’t working. Not when prices rise at the shelf and fall at the farmgate. The solution isn’t scale. It’s fairness, visibility, and rebalancing power. That means: Mandating cost-reflective contracts between retailers and suppliers Enabling collective bargaining rights for growers Building transparent data systems linking production costs to consumer prices Introducing transition finance for smaller producers navigating reform and climate pressure And holding supermarkets publicly accountable for margin extraction But more than anything, it means recognising what we’re losing, before it's gone. Final word If you ate a vegetable today, it likely came from someone who’s considered giving up in the past year. Not because they don’t care. But because caring doesn’t pay. This isn’t about nostalgia. It’s about sovereignty, over what we eat, how we grow it, and who gets to stay in the system.  Because the next time you see rows of green stretching to the horizon, you might want to ask: How many of these fields are already planning their last harvest?
By John Elliott June 20, 2025
If you're leading an FMCG or food manufacturing business right now, you're probably still talking about growth. Your board might be chasing headcount approvals. Your marketing team’s pitching a new brand campaign. Your category team’s assuming spend will bounce. But your customer? They’ve already moved on. Quietly. Like they always do. The illusion of resilience FMCG has always felt protected, “essential” by nature. People still eat, wash, shop. It’s easy to assume downturns pass around us, not through us. But this isn’t 2020. Recessions in 2025 won’t look like lockdowns. They’ll look like volume drops that no promo can fix. Shrinking margins on products that no longer carry their premium. Quiet shelf deletions you weren’t warned about. The data’s already there. According to the Australian Bureau of Statistics, consumer spending is slowing in real terms , even as inflation eases. The Reserve Bank confirmed in May: household consumption remains subdued amid weak real income growth . And over 80% of Australians have cut back on discretionary food spending , according to Finder. They’re still shopping, just not like they used to. A managing director at a national food manufacturer told me recently: “We won a new product listing in April. By July, it was marked for deletion. The velocity wasn’t there, but neither was the shopper. We’d forecasted like 2022 never ended. Rookie mistake.” That one stuck with me. Because I’ve heard it before, just in different words.