From press release to playbook: Communicators’ role in succession planning

Target, Starbucks, Nestle, Nike and Hershey are among the name brands who welcomed a new leader recently. With CEO exits at or near record highs, communications leaders and their teams are facing fresh challenges.

Bosses now find themselves a target of criticism from the White House, making an already challenging time of transition even more fraught. Last month, President Trump cited national security concerns when he called on Intel CEO Lip-Bu Tan to step down, before making a deal that secured Tan’s position as well as a 10% stake in the Silicon Valley chipmaker for the U.S. government.

“Now, more than ever, the market and all the stakeholders are paying close attention to who that next leader is going to be,” said Anthony Nyberg, faculty director of the Center for Executive Succession at the Moore Business School-University of South Carolina. “Board members tell us nonstop that this is their most important job, and we see frequently when companies get it wrong in some way that there are substantial shareholder costs.”

While the reputational challenges of CEO succession are significant, so too are the opportunities for communicators to prove their strategic business value.

The high stakes of succession

Everything that could be at risk for an organization is magnified during a succession, Nyberg said.

According to an analysis published in Harvard Business Review, the cost of badly managed CEO and C-suite transitions is nearly $1 trillion in market value. To top it off, only 21% of companies have a formal succession plan in place, meaning most companies are at risk due to poor planning.

And for communicators, their role is critical in planning for a successful succession if not always fully recognized.

The evolving role of communicators

The board of directors and key internal stakeholders such as HR are deeply involved in leadership succession, but the role of communicators often develops later, as the board turns to making the announcement and planning for the immediate aftermath.

The best quality CEO succession transitions often take a year or more, and communications should be involved in every part of that planning, Nyberg said.

Communicators can help the leadership team and incoming CEO think about all the stakeholders and steps for rollout, including how and when to message. Will they speak to employees first, or will they speak to investors on Wall Street? The order is important.

“People are paying attention to every single action and every single move,” he said. “It’s like being President … which country, which prime minister are they seeing first? It all matters.”

Nyberg pointed to the 2018 appointment of veteran insider Stephen Squeri to replace longtime American Express CEO Kenneth Chenault as an example of a succession done right. More recently, AbbVie’s appointment of president and COO Robert Michael in 2024 is another succession that went well.

What’s expected of CEOs and how communicators can help

While they’re not likely to be involved in direct discussion with the board about choosing the next leader, communicators should still be poised to take action.

Nyberg recommended building a strong understanding of the organization’s strategy and how it can win in the marketplace to develop messaging that will resonate with investors. Studying competitors’ investor calls, in addition to preparing for your own, is one way to gain a better understanding of strategy.

“To be involved in this process means trying to understand what the future leader will need to be successful,” Nyberg said. “So that means yourself having to understand what that success would look like and what it might take to get there.”

Communicators also bring a strong understanding of company culture and can help the new leader infuse themselves into that culture. Storytelling and getting the leader in front of employees in an authentic way through town halls, video or road shows are ways communicators can set them up for success.

“Over time, we’re seeing an increasing need on the part of employees to feel like they can relate to CEOs,” Nyberg said. “They want direct contact and CEOs need to at least appear to identify well with everyone.”

Build relationships and provide clarity

Clear and consistent communication of plans can build trust and reduce uncertainty. How executives handled the COVID pandemic and disruption to business provided an example of what good communications can look like.

“We saw the massive ramp-up in the quality and quantity of communications from CEO and other C-suite leaders through the organization,” Nyberg said. “In all our own research, we found that employees really responded well to those leaders that were great communicators, which I assume the communications people should get a lot of credit for.”

The bottom line in executive succession is to build relationships and provide clarity during a time of change, both core areas of expertise for communications professionals.

“There’s extraordinary uncertainty which creates a lot of fear in employees,” Nyberg said. “Anything that communications can do to help reduce that fear by alleviating some of those concerns will help that new leader get off to a better start.”

Anthony Nyberg, director of the Center for Executive Succession at the Moore Business School-University of South Carolina, will be speaking at the Communications Leadership Council Member Retreat in December. For more information on becoming a Council member, visit commscouncil.ragan.com.