When Sally Smith became the chief executive officer of Buffalo Wild Wings in 1996, it wasn’t exactly a planned event.

According to Smith’s account published in the New York Times (as part of Adam Bryant’s Corner Office interview series on Dec. 13, 2014), the restaurant franchise had hired a search firm to find a new CEO when its longtime CEO/founder decided to move on. And they found one—the head of operations of another restaurant.

But on the Monday he was scheduled to start his new role, the incoming CEO was nowhere to be found. He had had a change of heart and simply didn’t show up.

“You should do it,” the Buffalo Wild Wings board told Smith, a former auditor and then CFO, after huddling for a few days to deliberate on the matter.

The story isn’t entirely unusual.

On Dec. 31 last year, financial publications including the Wall Street Journal and Financial Times reported that Netherlands-based agricultural commodities trading giant Louis Dreyfus Commodities would go back to the drawing board to find a new CEO after appointing Mayo Schmidt, the head of a Canadian grain handler, to the post a month earlier. Schmidt had been selected over two internal candidates after an 18-month search. But before his official Jan. 1 start date, the company announced that “a more detailed analysis of the terms and conditions of their planned employment relationship” led the parties to a joint decision “not to proceed with the engagement.”

Both these companies were forced to devise a Plan B. And for the trading house, the FT report suggested that it could take another eight months to find a replacement, noting that 30 people had been vetted for the post on the first go-around.

Still, some companies—including many property/casualty insurers—don’t even have a Plan A for CEO succession. Nearly 60 percent of P/C insurers surveyed by Carrier Management and The Jacobson Group do not have written CEO succession plans in place, according to an exclusive survey report summarized in the first-quarter edition of our magazine. Only 30 percent said their companies could have a new CEO in place immediately in the event of an emergency, while 37 percent would take two months or more.

The CM/Jacobson survey is the only one to focus exclusively on P/C insurers, making it a valuable benchmarking resource for our industry. CM articles summarizing the survey’s highlights also provide comparisons to broader studies for all industries, along with expert advice on succession planning basics.

Among the nuggets of advice: “One reason companies fall short at succession planning is that they often select the wrong model for their current situation. A company may need an external recruit to lead a turnaround, for instance, or may have the capability to groom multiple internal executives over a period of time to allow the most promising one to shine through.”

That advice comes from David Larcker and Brian Tayan of the Corporate Governance Research Initiative at the Stanford Graduate School of Business and Stephen Miles of The Miles Group in their March 2014 research report titled “Seven Myths of CEO Succession.”

In the P/C insurance industry, we need look no farther than Berkshire Hathaway for the latest discussion of picking a model to fit the situation. In his much discussed segment of the company’s 2014 Annual Report, Vice Chair Charlie Munger suggested that National Indemnity’s Ajit Jain or Berkshire Hathaway Energy’s leader, Greg Abel, could step in under a “Buffett-left-tomorrow” scenario.

For those companies contemplating CEO succession over the longer term, Carrier Management provides a separate analysis of the qualities for the leaders of tomorrow who can spearhead innovative strategies: “Are New Leaders Needed to Guide Insurers Ahead?

As for turnaround situations, we have profiled the successors who have made their mark in leading some of the most significant P/C insurer transformations in recent years—Christopher Swift at The Hartford, David Duclos of QBE North America, and Mike Foley, whose work at Zurich North America Commercial started back in 2006.

Highlights of the CM/Jacobson CEO Succession Survey will be published online for Carrier Management members later this month.

To become a member, visit www.carriermanagement.com/signup/

Topics Leadership Property Casualty