Leadership Transitions: The Six Mistakes Organizations Can’t Afford to Make

Leadership transitions are some of the most critical moments in an organization’s life cycle. When handled well, they ensure stability, build trust, and create momentum for the future. When mishandled, they leave lasting scars on performance, culture, and reputation.

Yet, despite the stakes, only 21% of organizations have a formal succession plan in place. That means nearly 80% of companies are approaching leadership transitions reactively, hoping for the best instead of preparing for the inevitable.

The Rising Tide of Transitions

The challenge is only growing. With 10,000 Baby Boomers retiring every day, the volume of leadership handoffs is accelerating. At the same time, organizations are navigating turbulence at the top:

• 33% of new-to-role leaders lack confidence in their ability to succeed.
• 43% of executives experienced turnover of more than half their leadership team in the past year.
• 56% of leaders report burnout, especially among Gen X and Millennials.
• 31% of senior leaders don’t trust their leadership team to perform in the first 12 months.

Source: LHH Embracing the Transformation of Leadership: 2025 View from the C-Suite

Against this backdrop, avoiding mistakes in leadership transitions is critical.

Six Common Mistakes (and How to Avoid Them)

Mistake #1: Discounting the Impact on Peers

When a senior leader departs, the ripple effect on their peers can’t be underestimated. These executives have built trust, collaboration, and sometimes even personal loyalty over the years. A messy or contentious exit - particularly if the leader feels pushed out or treated unfairly - can breed fear and resentment across the leadership team.

Fix: Organizations must recognize that leadership transitions are not just about the individual leaving, but also about the stability of those who remain. Transparent communication, dignified offboarding, and fair treatment preserve peer trust and minimize the risk of cascading departures.

Mistake #2: Overlooking Business Risks

Leadership exits are public events. Stakeholders—employees, customers, investors, and even the media—scrutinize how they’re managed. A clumsy transition can damage brand reputation, weaken talent pipelines, and disrupt team morale.

Fix: Treat leadership transitions as enterprise risks. Communicate leadership changes internally first, if possible, keeping market sensitivity in mind. Develop clear communication plans to reassure stakeholders, protect the employer brand, and stabilize operations. By proactively managing both internal and external narratives, organizations can turn a potential crisis into a demonstration of strength.

Mistake #3: Failing to Establish a Transition Team

Too often, leadership transitions are left to HR or the board without a clear structure. But these events are too consequential to manage ad hoc. Without a dedicated team and playbook, ambiguity and confusion take over, fueling stress and slowing momentum.

Fix: Establish a cross-functional transition team responsible for ensuring an orderly handoff. This should include succession planning, knowledge transfer, communications, and onboarding. Engaging third-party advisors can provide objectivity and help ease tensions on both sides of the transition.

Mistake #4: Offering Standard Outplacement Services

Executives are not like other employees when it comes to career transitions. Their options are broader—board service, venture capital, entrepreneurship, portfolio careers—and the stakes are higher. Standard outplacement packages simply don’t address this complexity.

Fix: Provide senior leaders with bespoke transition support tailored to their experience, networks, and goals. Doing so not only honors their contributions but also positions them as potential brand ambassadors and long-term allies.

Mistake #5: Failing to Hold Succession Discussions

Succession planning often feels taboo. Executives may interpret it as a lack of confidence in their performance or resist the conversation altogether. But avoiding the issue leaves organizations exposed and unprepared.

This reluctance is especially problematic given that 56% of leaders, particularly Gen X and Millennials, report burnout. Without proactive planning, sudden departures due to stress or disengagement can blindside the organization.

Fix: Normalize succession discussions as part of leadership development, not as an end-of-career conversation. Provide senior leaders with coaching and career planning resources that make these discussions constructive rather than threatening.

Mistake #6: Missing the Value of Influence

Departing leaders carry immense influence, not just internally, but also externally with clients, analysts, suppliers, and the media. Mishandling their exit risks losing this goodwill.

In fact, many leaders don’t truly “retire.” Our research shows that 56% of Baby Boomer executives plan to start a business or take a new role outside their company within three years. Without a positive transition, organizations risk turning former executives into competitors instead of advocates.

Fix: Reframe departures as opportunities to extend relationships. Engage outgoing leaders as advisors, mentors, or ambassadors, ensuring that their external influence continues to strengthen the brand.

Turning Risk into Momentum

Leadership transitions don’t have to be moments of disruption. In fact, when handled strategically, they can become growth opportunities. Organizations that manage them well:

• Capture institutional knowledge before it walks out the door.
• Strengthen continuity and culture during change.
• Set new leaders up with context, coaching, and confidence.
• Position outgoing leaders as ambassadors and mentors.

As John Morgan, President of Career Transition, Career Mobility and Leadership Development & Coaching, LHH put it: “This is not about filling shoes. This is about transferring judgment, preserving strategic context, and enabling confident leadership continuity.”

For more insight on navigating leadership transitions, download The Leadership Handoff.