Today, many organizations are using the concept of succession planning to a greater extent as a way to identify and develop employees with leadership qualities to assume greater responsibilities in future. Organizations which develop effective succession management systems, gain in productivity and stability but CEOs must keep themselves involved over the long haul to achieve positive and sustainable results. Succession planning progression itself must reflect the quality of leadership that an organization is striving to develop its future leaders. There is a greater demand for a culture of openness.

In today's competitive and turbulent business environment, succession is the act or right of taking over another person's place in office, duties or rank. Essentially, succession planning is very crucial in any well-managed business organization because replacements for executives who retire, quit or dismissed are chosen through leadership succession. Succession planning is an orderly process of grooming and identifying the people with all kinds of necessary competencies to replace managers. When the CEO of Boeing, Phil Condit resigned in December 2003, there was no immediate successor to take up the responsibility. Then, the company had to put the previous president, Harry Stonecipher in that position to avoid the embarrassment of being an organization running without a CEO. At the same time, when Vodafone's CEO, Sir Chris Gent announced to leave the company in a year's time, Vodafone also had no succession strategy in place. Such situations may drag the companies to face several qualms and create confusion for all stakeholders, which may be dangerous to the whole organization.

Succession planning is an important responsibility of senior leadership and is vital for the long-term health of an organization. According to consultant, Chris Pierce-Cooke's observation, companies lacking succession plans are fragile and they lose the intellectual capital that goes with the people who have left. Due to this, they also lose traction, momentum, morale, productivity and customer service. In addition, when a capable leader leaves and no well-regarded replacement is named, the stock price of the companies might plunge as much as 10%.

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