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Most bungled successions can be traced to five failings.
First, many incumbents are reluctant to give up power, either hanging on too long or trying to foist like-minded successors onto their boards.
Second, when appointing new leaders, boards often choose a safe replacement, rather than someone who will question the directors' roles.
Third, swayed by force of personality, boards frequently fail to define or adhere to an objective set of selection criteria.
Fourth, many don't look beyond the most visible senior management candidates, and therefore fail to identify strong potentials from the next generation of executives.
Finally, short-term concerns-such as antsy shareholders-are allowed to dictate the succession timetable.
Add to this the usual heady mix of egos, corporate politics and greed, and you have a recipe for trouble.

Hiring an outsider masks the hard truth that a company has not developed a pipeline of leaders from among its ranks who can step in and manage the bigger challenges of the day.