Maria stared at the conference room full of expectant faces. As the newly appointed CFO of a regional healthcare system, she'd just presented her first strategic recommendation to the board. Her self-doubt felt overwhelming. She'd been groomed for this role for two years, shadowed her predecessor through countless board meetings, and knew every line item in the budget. Yet three months into the position, she was struggling in ways no one had anticipated.
The technical aspects of the job? Those came naturally. But navigating board dynamics, shifting from tactical execution to strategic vision, and leading former peers who now reported to her felt like learning a completely different language. The succession plan had prepared her beautifully for the job's functional requirements. What it hadn't prepared her for was the profound identity shift required to become an executive.
Maria's story isn't unique. It's one that's repeated in all industries, and it represents one of the most expensive blind spots in talent pipelines today.
The Head of Engineering and the Head of Customer Success had both been making conflicting decisions about feature priorities, each genuinely believing they had final authority. Engineering built features customers didn't need. Customer Success made promises engineering couldn't deliver.
The Hidden Flaw in Most Succession Plans
Organizations that have invested in succession planning are already ahead of most companies. These organizations understand the risks of leadership gaps and have taken concrete steps to identify and prepare the next generation of leaders. They've created development opportunities, mapped out potential pathways, and built visibility into who's ready for what.
Yet even with this thoughtful preparation, something puzzling often happens. Promising leaders struggle after promotion. Some leave within a year. Others stay but underperform. Still others execute well technically but fail to provide the strategic leadership the position demands.
The problem isn't that succession plans are wrong. The problem is that most succession plans focus exclusively on role readiness rather than leader readiness. They answer the question "Can this person do the job?" without addressing the more critical question: "Can this person lead at this level?"
These are fundamentally different capabilities, and confusing them costs organizations dearly.
Why Executive Transitions Are Different
When someone moves from individual contributor to manager, they're learning to lead others for the first time. That's a significant shift. But when someone transitions into an executive role, particularly at the VP or C-suite level, the change is exponentially more challenging.
The complexity of the relationships they're managing can be staggering. As a director, a high-potential leader might have managed relationships with their team, a few peers in other departments, and their boss. As a VP or C-suite executive, they may suddenly be navigating relationships with other cross-functional leaders, board members, and external stakeholders where every decision has real ramifications.
Decision-making fundamentally changes, too. Directors generally make operational decisions with relatively clear parameters and shorter time horizons. Executives make strategic decisions with incomplete information, longer-term consequences, and far greater ambiguity. These are very different skills, and sometimes what makes someone successful at the director level can actually work against them as an executive. The detail orientation and hands-on problem solving that earned them the promotion? Those can become liabilities when they need to be setting vision and empowering others.
There's another shift that catches many leaders off guard. As a director, their primary responsibility is leading their functional area well. Success means deep subject matter expertise and flawless execution within their domain. But at the executive level, that expertise is just table stakes. Now they're also responsible for making decisions that serve the organization as a whole, even when those decisions don't benefit their own area. This expanded perspective requires knowing when to speak up on topics outside their direct responsibility and when to defer. It's a balancing act that many high performers find surprisingly difficult to navigate.
Finally, there's the perception of loneliness. Leaders making this transition quickly discover that the things they say and do now carry more weight, and as a result, there are fewer people they can use as a sounding board. They often feel like all eyes are on them and that everything rests on their shoulders. The shift requires them to build new relationships with peers at the executive level and often with external advisors in similar positions. People who understand the pressure they're under and can be a thought partner or support system. For many talented professionals, this is the hardest part of the transition, and it's the piece succession plans most often overlook entirely.
The Real Cost of Getting It Wrong
When executive transitions fail, the impact radiates throughout the organization. There's the direct cost of recruiting a replacement, but that's just the beginning. The organization loses institutional knowledge that took years to build. Key stakeholder relationships become disrupted. Uncertainty spreads through the teams that leader oversaw. Other talented employees who were counting on that leader's success may also be lost.
Perhaps most significantly, failed executive transitions damage organizational culture and employer brand. High-potential employees throughout the organization are watching. When they see someone groomed for leadership struggle and fail, they draw conclusions about whether they want to pursue leadership themselves, whether the organization truly develops its people, and whether they should start looking externally for their next opportunity.
Despite the costs, the rate of executive failure is staggering. Depending on the source, estimates range from 40% to over 60% of executives failing within 18 months of taking on a new role. That's not a succession planning issue. It's a leadership development gap.
The most successful organizations don't treat succession planning and leadership development as separate initiatives. They integrate them into a comprehensive approach that prepares leaders not just for new responsibilities but for new ways of thinking and operating.
This integration starts well before the transition. While the succession plan identifies the technical competencies needed for the role, leadership development focuses on the executive capabilities required: strategic thinking, executive presence, stakeholder management, decision-making in ambiguity, and the self-awareness to navigate the transition itself.
Assessment is critical here, but not just skills assessment. Organizations need to understand where their future executive is developmentally. How do they handle complexity and ambiguity? How developed is their strategic thinking? How do they respond to conflict at senior levels? What's their leadership identity, and how prepared are they for the identity shift the new role will require?
While preparation is valuable, the transition period itself is where coaching can become invaluable. The first six months in an executive role are make-or-break. This is when the new leader is establishing credibility, building relationships, learning the unwritten rules of executive leadership, and trying to deliver early wins while resisting the urge to revert to their old operating mode. Having a coach who understands executive transitions can be the difference between a leader who thrives and one who plateaus or fails.
For organizations wondering whether their succession plan has this development gap, here are the red flags to watch for:
The succession plan focuses primarily on job shadowing, stretch assignments, and technical skill building, but doesn't include coaching or leadership development specific to the target role level. High-potential leaders can articulate what the role does, but they haven't grappled with who they need to become to do it successfully.
The organization promotes people based on strong performance in their current role without assessing their readiness for the fundamentally different demands of executive leadership. There's an assumption that someone who excels at tactical execution will naturally excel at strategic leadership.
There's no structured support system for newly promoted executives. Once they transition into the role, they're expected to figure it out on their own. After all, they're smart and capable, that's why they were promoted.
These patterns are common across organizations. But recognizing them creates an opportunity to ensure that internal promotions are successful, allowing leadership teams to focus on executing strategy rather than managing transition crises.
Succession planning represents a significant investment in an organization's future. Organizations identify talented people, give them opportunities, and prepare them for expanded responsibilities. But without equal investment in their leadership development, particularly through the transition itself, the most critical piece is left to chance.
The leaders who will drive organizations forward don't just need to be ready for bigger jobs. They need to be ready to lead at a fundamentally different level. That requires a development strategy, not just a succession plan.
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Interested in identifying gaps in succession planning? Want to explore what it would look like to ensure leaders are getting the development they need to be effective? Book a call to discuss how we can help transform succession plans into true leadership pipelines.