Are Asian Businesses Equipped With Succession Plans?

An entire ship will grapple with uncertainty when a new captain takes over the wheel. Questions will undoubtedly run through the mind of every crew member. Can they safely steer the vessel through uncharted waters? Will the journey forward be as smooth as it has been thus far, or are we in for a bumpy ride? More importantly, why place the future and livelihoods of an entire organisation in the hands of someone completely green?
Did you know that 85% of Asia’s billionaires are still planted firmly in the decision-making seats of their family businesses with no successors? On the whole, APAC also lags behind in succession planning at an enterprise level with only 50% of family enterprises having clear succession plans in place.
Why Asian family businesses lack successors
Sometimes, the reasons for holding on are logistic. Not every family business has willing successors. With each generation, the number of willing successors gets lower. In a joint study between Deloitte and Singapore Management University (SMU), 77% of first-generation respondents believed that family members should be in charge of their business. That number falls to 24% amongst third generation respondents.
Other reasons may appear less pragmatic, but nonetheless should not be discounted. Having done things their own way for decades, family business operators may not be as open to external input when it comes to major business decisions. While 4 in 5 Singapore businesses admit to experiencing family conflict, only 2 in 5 of them have governance policies written in black and white as fail-safes should things go wrong. However, this problem is by no means limited to family businesses.
As much as 80% of clients of high net worth (HNW) individuals in Asia have requested for leadership renewals as the need for a new generation of brains and expertise grows each day. It’s also worth noting that 85% of Asia Pacific companies are owned by family groups.
Succession planning is the elephant in the room that needs to be brought into the spotlight as soon as it can take years to tackle.
The true cost of poor succession planning
With a rapidly ageing population, corporate Asia is on the cusp of intergenerational wealth transition - wealth that can be easily lost if succession plannings are not handled properly. Harvard Business Analysts estimate that S&P 1500 companies lose a collective total of $1 trillion a year due to poor CEO and C-suite transitions. Potential losses are not just limited to fiscal ones, either.
New leaders often find themselves stepping up to the plate without the proper tools in hand, leading to a 50-70% failure rate within the first 18 months of promotion.
During that time, high profile leaders can cause company share value to tank, employees further down the chain of command to leave, and eventually take several staff along with them when they finally do exit.
Good succession planning starts early
Next generation successors have big shoes to fill. While 77% of APAC businesses have digitalisation listed as a key priority, and far fewer organisations in the region are confident in their existing digital capabilities.
In a PWC regional survey, only 24% and 45% of respondents from Malaysia and China respectively, spoke positively about their digital roadmap in the coming years sparking concerns whether candidates will be capable to bring companies from where they are at, to where they need to be.
Identifying potential candidates early on, prior to the 12 to 36 month period of preparation, is key. Ideally, leaders should be around to personally guide and groom their successors before they make their exit.
Succession planning does not just happen at the top, either. Especially when CEOs are picked internally. Entire lines of current staff will have to be shifted upwards in order to prevent gaps in the chain of command. HR departments will have their job cut out for them ensuring that candidates are identified and groomed at every single level.
Of course, the option for hiring externally is always there. But external CEO hires are usually more expensive than internal hires. They will also spend more time getting familiar with the ropes and potentially bring in an entire host of external influences that can greatly shake up and company, for better or worse.
Promote fairly and transition smoothly with digital coaching
Succession represents uncertainty, for both leaders and employees alike. Understanding the psychological workings behind our apprehensions over uncertainty can help us tide through times of disruption. Personal coaches can assist leaders on their journey by helping them pry apart the inner workings of both their brains and that of the organisation.
Through CoachHub’s digital transformation platform, leaders and employees can track their progress and skills development in a quantifiable way, allowing decision makers to objectively see when candidates are ready to take over the reigns. Read more about how to become the leader your employees need during these times in our eBook.
FAQ
At CoachHub, we believe in the power of aligning individual growth with organisational objectives. Our dedicated coaches work closely with coachees to ensure that their growth plans are directly linked to your company's overarching goals. This includes addressing specific leadership development needs within different departments or teams, and recognising that each area may have unique challenges and requirements.
To achieve this alignment, we collaborate closely with our clients and their senior leaders, taking the time to understand their organisation's specific challenges, objectives, and organisational culture well. By gaining deep insights into your company's dynamics, we can tailor coaching plans that address the specific needs of different teams and individuals.
Our approach is highly customised and adaptable. We recognise that each coachee has unique requirements, and we leverage our expertise to develop coaching plans that are relevant and effective for all participants, regardless of their role or level within the organisation. Whether it's helping to develop leaders, retain talent, improve leadership skills of middle management, or support C-suite executives, our coaching programs are designed to cater to diverse needs and ensure maximum impact.
By aligning growth plans with your company's objectives, we create a cohesive approach that enhances overall organisational success. Our coaches help coachees identify areas for improvement, set meaningful goals, and develop actionable strategies to bridge the gap between their current competencies and the desired leadership abilities. This alignment not only facilitates personal and professional growth but also contributes to the long-term success of your organisation.
With CoachHub, you can be confident that our coaching programs are tailored to address the specific leadership development efforts within your organisation. By collaborating closely with our clients, we ensure that our coaching plans are relevant, effective, and aligned with your company's objectives, driving growth and excellence across all departments and levels.
At CoachHub, we understand the importance of scalability when it comes to your leadership development program. That's why our programs are thoughtfully designed to accommodate a large number of participants simultaneously, ensuring that organisations of all sizes can benefit from our services. Whether you have a small team or a global workforce, our coaching platform is equipped to handle the scale.
With our advanced digital coaching platform, we bring high-quality coaching directly to employees all over the world. The beauty of our online sessions is that participants can access them from anywhere, at any time. This flexibility empowers employees to engage in coaching without geographical constraints or time zone limitations. Whether they're working from home, travelling for business, or stationed in a different country, our platform ensures that they can easily connect with their coach and participate in sessions at their convenience.
The digital nature of our coaching platform also means that participants can enjoy a consistent and seamless coaching experience, regardless of their location. Through video calls, instant messaging, and other interactive tools, our platform fosters a sense of connection and engagement between the coaches and participants. This virtual environment not only saves time and resources but also allows for regular and ongoing coaching support without the need for in-person meetings.
By leveraging the power of technology, our scalable coaching programs break down barriers and provide accessible coaching solutions to organisations and individuals around the globe. Whether it's a small team or a multinational corporation, our platform ensures that every participant can benefit from high-quality coaching, anytime and anywhere.
Absolutely! CoachHub's leadership development program is designed to seamlessly integrate with your existing talent development and performance management initiatives. We understand that every company has its own unique needs and goals, and that's why our coaching sessions are completely tailored to meet those requirements. Whether you're looking to strengthen leadership skills, foster personal growth, or achieve organisational success, our program aligns perfectly with your company's specific objectives.
By customising our coaching sessions, we ensure that each individual receives the guidance and support they need to thrive. We take the time to understand their strengths, challenges, and aspirations, and then craft a coaching experience that caters to their personal growth journey. This way, we can provide targeted development opportunities that directly contribute to their success within your organisation.
When you integrate our program with your leadership development efforts and performance management initiatives, you create a powerful synergy. Our tailored approach complements and reinforces your existing efforts, allowing you to build a comprehensive framework for maximising the potential of your workforce. Together, we can create an environment where employees are motivated, empowered, and equipped with the skills they need to excel.
So, rest assured that with CoachHub's leadership development program, you can easily integrate coaching into your existing initiatives and achieve remarkable results that align with your company's requirements.