The sudden resignation of Ken Lewis from Bank of America highlights, yet again, the risks that family and other businesses take in failing to prepare for the inevitable succession of leadership.

A succession plan doesn’t mean you have all the work done and the perfect successor is comfortably waiting in the wings, although that would be desirable. It does mean, at a minimum, that you have an interim CEO in place who can hold down the fort while certain details are worked out and long term plans are implemented. Developing an emergency plan also gives the Board or family a chance to discuss these often thorny subjects without stockholder worries, employee hand-wringing or the emotional burden that comes with a fallen leader.

Often, this process highlight gaps within the family or board about the suitability of a particular successor. (more…)