Business can learn a thing or two about succession planning from sport

All football fans – and indeed anyone who regularly follows the major sports headlines – will no doubt be aware of the plight currently faced by the world's biggest team, Manchester United.

Up until the end of last season, Manchester United had managed to retain their status as one of the best teams in the world and one of the biggest brands in global sport. This was in no small part thanks to the empire built by the previous manager, Sir Alex Ferguson, who held the post for the best part of three very successful decades.

However, when Ferguson announced his retirement and David Moyes stepped in as the new man in charge, things quickly began to unravel. Results on the field have been atrocious, team morale is at an all-time low and the club is languishing in seventh place on the league table – circumstances that are simply unacceptable for a club of such stature.

While it is easy to point to the apparent incompetence of Moyes, who looks well out of his depth, critics have argued that a fair share of the blame should be shouldered by Ferguson and the club as a whole – as many of the struggles this season have been borne out of poor, ill-judged succession planning.

Effective and well-thought-out succession planning is an equally important consideration in the parallel worlds of sport and business. The Manchester United fiasco brings with it three very important lessons in change management for businesses:

1. The focus might be on the leader, but it's all about the team

Although the core focus of succession planning is indeed on selecting a leader to take over the reins, the needs and expectations of an organisation's employees cannot be neglected.

One of the main causes of Moyes' failure in his role is a lack of fit with the existing team – Moyes simply entered an environment with which he did not share the same philosophy. Much to the chagrin of players and fans alike, he made wholesale changes to the coaching staff, replacing key individuals with those he was more familiar with.

At the end of the day, a business's leader cannot drive the organisation forward on their own. If a leader is not prepared and competent enough to continue with the culture already instilled in the organisation, failure is likely to be the only result.

2. Don't underestimate the disruptive effect of a change in leadership

When a leader has been at the helm of an organisation for 27 years, as Ferguson has, it's fair to say it will take a bit of adjusting when a new person takes over.

A leader is more than just the person at the head of a company – as classic examples such as Richard Branson and Steve Jobs show, well-established leaders are often seen as a brand or icon for the company, and replacing them is always going to take a bit of effort.

Businesses therefore need to be stringent in their succession planning decisions, making sure they select the individual who will bring the least disruption to the organisation. In addition to ensuring they possess the obvious skills and experience required, making use of personality assessments can help in identifying those with the high potential leadership to succeed.

3. Make sure the new leader has the resources to succeed

Regardless of whoever takes over a company, organisations must ensure the necessary resources and tools are in place to enact a smooth transition.

Succession planning is essential in this regard, and it's concerning that Australian businesses simply aren't investing enough effort into it. According to the MGI Australian Family and Private Business Survey 2013, 65 per cent of family business owner-managers claim they are not ready for succession, and well over half indicate they don't plan to do anything about it in the next 12 months.

One of the reasons for Manchester United's shortcomings this season was an ageing, declining squad, something which many accuse Ferguson of doing nothing to address. Had this problem been tackled long before he planned his retirement, it is possible that the club would not have found themselves in such dire straits.