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Small Business Digest


Succession Plans Prevent Unhealthy Organizational Behaviors

Succession planning not only eliminates the uncertainty often associated with a change of leadership. 

Organizations and businesses should have a succession plan in case the chief executive officer and other top executives become ill or die, a new University of Michigan report says.

A succession plan should outline short- and long-term provisions, including requiring top executives to take physical examinations and disclosing the results, said U-M expert John Tropman.

"Magnifying the risk is that current approaches to dealing with an ill executive seem deeply flawed," said Tropman, a professor of non-profit management at the School of Social Work and adjunct professor at the Ross School of Business. "There are few clear guidelines about procedures and actions to be taken."

Illness among top executives is an unrecognized problem in businesses, organizations and government. It's assumed, Tropman said, that executives are healthy or functional, but that's not always the case.

This situation raises questions about when the board of directors or senior executives should intervene on the CEO's or president's behalf, and who makes the decision.

"It's not a question if you have an illness or not, but does the condition impair the executive's performance," Tropman says.

Tropman points to several ways how illness negatively affects executive performance and generates unhealthy organizational behavior:

* Physical effects---Illness depletes executive's energy for a demanding job. Lowered energy requires more rest, and treatment regimens require time.

* Intellectual effects---Some illnesses, such as brain injury or stroke, can lower one's cognitive ability in processing information and decision making.

* Intrapersonal/interpersonal effects---Illness impacts interaction with others because ill people tend to focus on themselves.

* Uncertainty reigns---Superiors and subordinates experience problems similar to those confronted by the ill person's family. Bosses do not want to intervene too soon. Subordinates do not want to appear overreaching but also do not want to delay intervention for fear of being blamed for undue delay.

"The organization must balance the rights of the individual with the company's best interest, which involves paying a salary for a competent person," he said.

The findings appear in this month's online version of Directors & Boards, as well as the third quarter 2008 issue. Tropman co-wrote the article with Robert Winfield, U-M chief health officer, and Penny Tropman, a principal at Midlife Renaissance and adjunct professor at the School of Social Work.

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