Why are people talking about this now?

In the week of Marks & Spencer’s results, leadership succession is one of retail’s biggest water-cooler conversation topics. All the fuss over the successor to Sir Stuart Rose (pictured) aside, effective succession planning is a vital element of ongoing business success.

Who is responsible for succession planning?

In a public company the chairman is ultimately responsible for hiring or firing a chief executive. The board’s nominations committee, chaired by a non-executive director, would be involved and is responsible for other top roles. For roles below the main board, the group HR director would be in charge.

Which retailers are good at succession planning?

Tesco’s track record of successful internal promotions to top jobs is admired across the industry and the retailer’s phenomenal rise shows how effectively it has developed talent and nurtured its future leaders.

Tesco’s leaders have decades of experience at the business. Sir Terry Leahy, for example, who joined the retailer in 1979 and was marketing director before becoming chief executive in 1997, is perhaps the perfect example of the merits of succession planning.

What factors are key to effective succession planning?

Fran Minogue, managing partner of Heidrick & Struggles’ global retail practice, says it is vital the board is aligned on what they are looking for in a new leader, and that they should not wait until there is a problem before thinking about succession.

She adds: “Make sure you’re hiring someone for the next five years and not just for today’s situation.”

Whitehead Mann partner and head of retail Sally Elliot says it is essential there is a process in place for companies to identify internal talent. She says: “You need a programme so that those individuals and the organisation are working on how to get them and the organisation to where they want to be.”

Moira Benigson, managing partner of MBS Group, says that in turnaround situations a chief executive often focuses, correctly, on delivering to customers and the City, but a third key element of long-term success – what is going on inside the business and who is doing it – is frequently forgotten.

She cites the turnaround of Asda by Archie Norman and Allan Leighton as an example of how things should be done. “They satisfied the City and customers and built succession, so that the whole retail industry is full of people that they grew.”

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