The Impact of Coaching on Succession Planning

Each year about 10% to 15% of corporations must appoint a new CEO (HBR, 2016). A separate study reveals that the longer it takes a company to name a new CEO during a succession crisis, the worse it subsequently performs relative to its peers.

Succession planning, the process of identifying and developing future leaders, is a strategic imperative for ensuring long-term success. However, to be effective, succession planning needs more than just identifying potential leaders—it requires actively developing them. This is where coaching plays a critical role.

Heidrick & Struggles and the Rock Center for Corporate Governance at Stanford University revealed that only 54% of boards were grooming a specific successor, and 39% had no viable internal candidates who could immediately replace the CEO if the need arose.

Coaching offers personalized development that equips emerging leaders with the skills, mindset, and confidence necessary to step into new roles. The synergy between coaching and succession planning strengthens leadership pipelines, enhances employee engagement, and ultimately ensures a seamless transition of leadership.

Your leadership development programs must be specific and targeted to the needs of individuals and the company. One of the most critical traits to develop in future leaders is self-awareness, followed by how to fully leverage one's strengths. (Gallup, 2017).

Here’s how coaching directly impacts succession planning:

1. Developing Future Leaders

Succession planning is not just about filling vacancies but about preparing individuals for future leadership roles. Coaching facilitates this development by offering tailored guidance that addresses both current and future challenges.

Leaders who receive both coaching and development programs are 2x more likely to be recognized for their performance and 1.5x more likely to apply new concepts to real-life business challenges (Talent Culture)

Through one-on-one and group sessions, coaches help potential leaders understand their strengths, identify areas for improvement, and develop critical leadership skills such as emotional intelligence, decision-making, and strategic thinking.

Coaching also helps individuals cultivate the mindset required for leadership roles. Emerging leaders need to shift their thinking from a tactical, operational focus to a more strategic and visionary approach. A coach helps them make this transition by providing the tools and feedback needed to think holistically and act with greater influence within the organization.

2. Building a Strong Leadership Pipeline

One of the primary goals of succession planning is to ensure that an organization has a steady supply of capable leaders ready to step into key roles. Coaching accelerates the readiness of these future leaders by honing their skills and preparing them for the demands of leadership. Rather than waiting for a leadership crisis to arise, organizations can proactively develop leaders who are prepared for future opportunities.

Diversity also plays a role in strong bench strength. Organizations with higher leadership diversity report 28% female representation in their high-potential pools, compared to only 18% in companies struggling with weak bench strength (Superworks).

By incorporating coaching into succession planning, organizations can more effectively build a deep leadership bench. Coaches focus on long-term growth, helping individuals evolve into leaders who can take on progressively greater responsibilities. This creates a continuous cycle of leadership development, ensuring that the organization is never caught off-guard by leadership gaps.

3. Enhancing Employee Engagement and Retention

Succession planning is not only about leadership; it also impacts employee engagement and retention. High-potential employees are more likely to stay with an organization that invests in their growth. Coaching demonstrates that the organization is committed to their development, offering them a clear path to leadership opportunities.

When leaders and managers are trusted and inspirational, employees find meaning in their work, feel like part of your culture and perform better. For example, employees who strongly agree they trust the leadership of their organization are 4.0 times as likely to be engaged and 58% less likely to be watching for or actively seeking a new job. Gallup.

Employees who receive coaching feel more valued and engaged, which in turn improves their performance and loyalty to the organization. This investment in talent development fosters a culture of growth, where individuals are motivated to contribute at higher levels. In this way, coaching supports not only the development of future leaders but also the retention of key talent.

4. Ensuring a Smooth Transition

Leadership transitions can be disruptive if not handled carefully. Coaching helps to mitigate this risk by preparing leaders for their new roles well in advance of the transition. This ensures that when a leadership change occurs, the incoming leader is fully equipped to step into the role with confidence and competence.

Coaches can also work with outgoing leaders to facilitate knowledge transfer and provide support during the transition period. This creates a smoother, less disruptive process, minimizing the impact on the organization and its employees.

5. Strengthening Organizational Culture

Coaching aligns leadership development with organizational values and culture. As leaders are developed through coaching, they are not only equipped with the technical skills needed for leadership but also with a deep understanding of the organization's culture, mission, and values. This ensures that future leaders are prepared to lead in a way that is consistent with the organization's long-term vision.

Culture correlates with performance. Based on our research of over 1,000 organizations that encompass more than three million individuals, those with top quartile cultures (as measured by our Organizational Health Index) post a return to shareholders 60 percent higher than median companies and 200 percent higher than those in the bottom quartile.

In conclusion, the integration of coaching into succession planning is essential for building strong, capable leaders who can guide the organization into the future. Coaching accelerates leadership development, strengthens the leadership pipeline, improves employee engagement, and ensures smoother transitions.