The event model and what it costs
In the event model, succession begins when a resignation lands. The board discovers the internal bench is thinner than the talent review suggested, the search starts from a cold market map, and time pressure pushes the process toward whoever is available rather than whoever is right. Cost appears as premium compensation, an extended interim period, and elevated failure risk in the first eighteen months.
The process model inverts the sequence. Capability requirements are defined against the strategy three to five years out, internal candidates are developed against those requirements, and the external market is mapped continuously so that a live comparison is always available.
What a working succession plan actually contains
For each critical role: the capability profile required by the forward strategy, two named internal candidates with an honest readiness horizon, a documented development plan for each, an emergency cover nomination that can act within 24 hours, and a refreshed external comparison group.
The emergency plan and the succession plan are frequently conflated. They should not be. Emergency cover optimizes for continuity and legitimacy; succession optimizes for strategic fit. The best emergency nominee is often deliberately not the eventual successor.
External benchmarking is a service to internal candidates
Internal candidates are sometimes protected from external comparison on the grounds that it signals doubt. The opposite holds in practice. An internal appointee who has been compared with a credible external field carries a mandate that survives the first hard decision, and the board carries a defensible record.
Where an internal candidate is not yet ready, benchmarking converts a vague concern into a specific development brief with a horizon attached. That is the difference between a plan and a hope.
Cadence
We recommend a twice-yearly review at nominations committee level, with a full external refresh every eighteen months for chief executive and chief financial officer roles. The review is short when nothing has changed, which is the point: a discipline that only becomes expensive when the picture moves.