Passing the torch without burning

Handing over. Taking over. Passing on. Lingering on. Letting go. Hanging on. These are the bread and butter of transitions. We call them change of guards. We call them succession. Passing the torch at any level is a critical and sensitive event in every organisational cycle. Handing over company assets like machines and equipment is far easier than handing over authority, power and influence.

Human beings are very attached to authority, familiarity and connectivity. Change is painful for them. The smallest of acts of change such as timings of office, of unscheduled meetings causes discontent. Imagine a big change of being the head of a function or organisation and then having to let go. This process, if done well, can really lead to sustainability and growth.

Transitions cause tremors and uncertainty if handled badly. Unfortunately, most companies do not have  STPs, i.e., strategic transition plans. Up to 46% of executive transitions are viewed as failures within two years. Unfortunately, founder-CEO handovers carry two to three times the failure risk of other transitions.

This statistic comes from Deloitte 2025 Global human trends report. And, leadership transitions are more frequent than ever. The Conference Board study reports that CEO turnover among top-performing S&P 500 companies jumped from 7% to 12% in 2025. The cost of CEO turnover is high. An abrupt and unplanned transition is exorbitantly costly. In normal cases the change of guards and the consequent decision making delays can take around 11 months. Factor in the new CEO and his own team, his own style etc., and the “stalled effect” may cost millions of dollars. Companies need to be proactive rather than reactive about these eventualities. Some “burning” challenges and strategies in the strategic transition plan are:

STP#1-Intentional Transitions: Sustainable innovation based companies have a concept called planned obsolescence. This means that before the market rejects it the company itself retires its products as they have a better innovation ready. Similarly, in organisations there is a need to do planned transition of their leadership line. If it is the founders, they need to step aside and let professionals take over. If it is the CEO, there has to be a plan for planned and/or volunteer exit.

Companies need to prepare for successors with timelines for transition. They also need to prepare for volunteer exits at key positions. The goal is that planned or sudden exits should happen with minimum disturbance to the organisation. Do companies have a plan of retiring CEOs? Does the company have a plan of replacing CEOs or major heads of teams if they decide to leave? Does the company discuss and document its intent to create planned transition? These are some key questions companies need to ask.

In most companies the CEO lasts till profits last. The thinking of not rocking a boat while it is sailing makes sense. CEOs delivering should be held on to. However, many times, just like star products, star CEOs may make the company go into a comfortably numb oblivion. Fresh heads may bring new perspectives. Companies therefore even in the best of times need to think of the life of a lead person’s tenure. It may be 10 years, or more, or less. In many Japanese companies the heads are then taken in as advisors as fresher blood is injected at the top. All this has to be comprehensively discussed and thoroughly planned to prepare people for this transition.

STP#2-Clarify early, prepare regularly: Once the intent is put into a thought through plan, the focus should be on how to take people on board on it. The resistance spots need to be handled diplomatically. Not easy for people to pass on the torch. It can create all sorts of insecurities. It can make politics flourish. That is why all new joining leads need to know that these positions have an expiry date. This should be something that needs to be explained as a vision of the company’s motto to RBP “rise beyond” plan. The RB plan should highlight how each position needs to be the stepping stone for a higher level including top leadership positions.

The performance appraisal should have a very detailed segment on RB elements. This needs to be normalised as a core value in the culture. Similarly the proactive preparation for any volunteer exit should be a bench strength KPI. If tomorrow a position becomes vacant, how long and how costly will be its replacement? The longer the time of filling the position with reasonable competence, the bigger the gap. This depends on what I call PPM i.e., proactive pipeline management. The pipeline has to give colour to the readiness factor. Is the person green and ripe? Is the person blue and raw? Is the person red and unready? Where are leaders resisting?

STP#3-Create Transition Interventions: This is a key enabling step. The main torch bearers may be swaying the torch deliberately to burn the hands vying to step in. The concept of Shadow CEO or Shadow lead for every function needs to be rolled out. These Shadow step ins need to be staggered into the transition. Starting from attending some key top level meetings to finally sitting on the Board meetings should have a clear progress map. Power distribution and delegation of tasks should be done with deadlines. The shadows should, with timelines, come out of the shadow and be ready to take over.

STP#4-Practice Adjustment accelerators: While potential candidates may be many, their ability to step up to the next level may differ. Keep accelerators ready. Put people in trainings. Appoint mentors with a particular objective. Send them on exposure studies. Let them have a Leadership Coach. Use Reverse mentoring for making the leaders aware of their own unconscious biases.

Most leaders are good at lighting the torch. They show the light in the dark. They brighten the fading horizon. They bring light at the end of the tunnel. While the lighting of the torch goes well, few are good at passing the torch. And that is where the distinction lies between good and great leaders. It is not how brightly your torch shines, but how many other torches have you lit that makes for leadership greatness.