Fifty-seven percent of executives say their companies don’t have documented plans in place for executive transitions, despite nearly 90% agreeing that succession planning is more important today than ever before. In addition, efforts to preserve an outgoing leader’s personal legacy — if elevated at the expense of effectively transferring institutional memory to an incoming leader — can complicate an effective executive transition.

These were among the key findings of a survey of 160 C-suite executives in the United States undertaken by History Factory to interrogate how executives think about and execute succession planning and why they find leadership transitions so challenging. According to History Factory, after a brief COVID-19-pandemic-era dip in what had been the highest executive turnover rate in more than 20 years, CEO transitions have rebounded sharply.

To position an incoming executive for success, the survey results suggest that corporations need to more effectively transfer institutional memory (the organization’s combined experiences, processes, data, expertise, values and information) from one generation of leaders to the next. This transfer of institutional memory should be at least as important as the emphasis on the outgoing leader’s legacy, which often receives greater attention, according to History Factory.

Key Survey Findings

• Ninety percent of executives agree that documenting the history and experience of the company for the next leader is important. Doing so creates benefits that include a smoother onboarding of new executives, the reassurance of employees and customers during a transition, the creation of a playbook for new executives facing familiar challenges and the positioning of the company as a M&A target.
• Fewer than half of executives said their companies have taken steps such as recording outgoing leaders’ stories or accomplishments for transition purposes to formerly pass on institutional memory to new leaders.
• Sixty-four percent of executives said they’ve completed plans to reinforce their personal legacies and 92% said their organizations largely support these activities.
• Seventy percent of CEOs agree that a CEO or founder’s legacy can lead to transition issues, especially if the outgoing CEO has served for a long time or if the company is family-led.
• Eighty-four percent of respondents agreed that a CEO or founder’s legacy often overshadows the skill set and experience of their successor.

“The good news is that executives are clear-eyed about how the rapid pace of change makes effective succession planning more important — and that passing along institutional knowledge is crucial,” Jason Dressel, president of History Factory, said. “But for too many companies, that understanding isn’t translating to concrete plans, and legacy is too often viewed as an individual and not an organizational priority.”

The tech industry reported the most pronounced challenges with succession, legacy and the use of institutional memory. While 84% of tech executives (versus 63% overall) strongly agreed that succession planning is important, only 18% said it is important to pave the way for the future leader (compared with 43% overall). Meanwhile, 62% of tech executives believe that tech companies face more skepticism regarding transitions than companies in other industries. Sixty-seven percent (versus 52% overall) believe that a longer tenured CEO complicates the transition to a successor.

Greentarget, a national research, market intelligence and communications firm, conducted this survey in February and March on behalf of History Factory. A total of 160 C-suite officers based in the United States, including 50 CEOs, responded to the survey from companies representing 15 industries. Thirty-five respondents hailed from the tech industry, which was the most represented industry in the survey.