In IT, any service interruption is usually covered within minutes or hours. But IT aside, continuity in organisations is often far less reliable.

The loss of a senior executive or a technical expert, whether to ill health or resignation, can knock growth and development plans completely off course. Yet the assumption is still often made that successors will naturally emerge without giving them a chance to prove whether or not they are up to the task.

The reluctance of leaders to plan their own exit is understandable. They have given their all in building up a department. To make it work, they have had to exercise tight control, so letting go can be difficult.

But if an organisation is to grow, it has to move beyond the stage of relying on an indispensable individual. However brilliant or original they might be, that person will not be there forever.

Fear is the number one reason why leaders hold on to control, says Mark Riminton at business coaching practice Shirlaws. ‘If they give away responsibility, they worry that their own role will be eroded,’ he says.

The answer, says Riminton, is to go beyond delegation. ‘Managers who delegate maintain responsibility for all tasks, becoming overloaded and stressed. It is unworkable in the long term,’ he says.

‘Instead, they should look to create an environment where direct responsibility for different tasks is spread across individuals in the department. It then becomes much easier to hand over, because you are simply replacing one piece of the jigsaw.’

The manager, says Riminton, can now spend more time on building strategy and building upwards for tomorrow.

In lining up the next head of department, do not settle for whoever’s turn it is next – or for a replica of who is already in the job. Look at potential candidates in relation to the business plan, says Bob Edenborough, a occupational psychologist and independent consultant.

‘Identify the gaps to be filled, and appraise all the people in the running for promotion,’ he says.

To avoid any risk of unwanted resignations, a thorough check must be made of their motivation. ‘Some really do want to move ahead and take up senior positions,’ says Edenborough. ‘Others see it as a lot of hassle and do not want to step outside of their particular area. If you are on the board, then you do have group responsibility.’

You also cannot assume that having a pool of talent means the succession will slot neatly into place. A good head of department may well turn out to be an ineffective board director. The only way to tell is to give them responsibility well in advance, with support to see who copes.

Otherwise you run the risk of promoting people to their level of incompetence, says Stephen Harris, a partner in corporate finance at business advisory and accountancy firm Mazars. ‘For succession to work, you have to plan and groom,’ he says.

You also have to give people defined roles. ‘Is the appointment just a long-service award where nothing really changes? Or is it an elevation to core management of the business?’ says Harris.

Then there is the question of timing. Do you swear them to secrecy and expect them to continue running their department for six months? Or do you announce a number of appointments at the same time? ‘If you just announce a new director, then it can become open season for shoulder climbing and back stabbing,’ says Harris.

Once the right leaders are in post, they will become more appealing to the rest of the industry. The question becomes how to tie them in, particularly as under-performing pensions mean executives rely more on having a share in the capital value.

The first psychological leap is for the founder to recognise that in taking the business forward, they are no longer the sole creators of value. Many leaders fail here: just six per cent of firms eligible for share incentive schemes operate them.

Many of these, says Martin Holden, head of the professional and consultancy group at business adviser Saffery Champness, are put in a place as a sop without any particular regard to the eventual succession.

But uncertainty can have dangerous consequences. If executives cannot see an exit plan for realising capital, then they will start to drift away. That is a sure way to surrender yourself for acquisition, says Holden. ‘If you do sell, you are unlikely to realise anything like the value that is inherent in the business. Strong management teams can triple or quadruple the value of what they have acquired in six months,’ he says.

Handled correctly, succession planning represents a clear intent of the future direction of the business, with far-reaching implications for its capital structure, as well as its leadership. Hard as it might be for executives to admit that their time is finite, it makes good financial and organisational sense to accept the inevitable and plan for their own graceful exit.

Case study, Scottoiler: www.computingbusiness.co.uk/2172811