Every company must be ready for C-level succession planning. Someone might leave voluntarily because of a career opportunity, shift in life circumstances, retirement, or even illness or death. Or a company might remove an executive for unsuitable action, lack of chemistry with the rest of the management team, or a lack of experience and skills to manage the next level of corporate growth.

Succession planning is a must for middle market companies. Such firms will be heavily affected by an aging workforce and a loss of experienced personnel. Unfortunately, relatively few are well prepared. A 2011 American Management Association survey showed that only 14 percent of respondents felt themselves "well prepared" to handle a sudden loss in senior management.

Middle market companies must swiftly prepare for the inevitable: replacing personnel, including those at the C-level. But the standard list of solutions devised for large corporations don't necessarily fit the realities and needs of a middle market company. Here are five things to remember for C-level succession planning.

  1. Clarify your business strategy. In the last 15 years, we've seen a collapse of the tech industry, a rebirth of that industry, a hot real estate bubble, and a rapid collapse of that bubble, along with the rest of the global economy. A person you've groomed in a growth economy might not be right for a recession or even volatile times. It's easy to say "look ahead" when doing so is difficult. But you can at least understand what the company's strategy might be under a range of options and then see how well potential candidates match. You might even decide that someone's idea could make more sense than yours.
  2. Hire someone for tomorrow's world, not today's. Related to the previous point is the need to have executives who can operate smoothly as the world changes. Some business principles remain steady, but the tactics and tools will change. You want people who either already possess the tools for tomorrow, or who can quickly adapt to them. For example, a potential CMO should have a grasp of social networking and data analysis. If candidates have yet to go onto Twitter, Facebook, or LinkedIn, they will likely be poor choices.
  3. Time is no longer on your side. Unexpected vacancies are worst when you're unprepared. A strategic vacancy with no plan for filling it can mean a loss of corporate value for an extended period. Data from 2010, according to Stanford University and executive search firm Heidrick & Struggles, suggested that 39 percent of all corporate boards had no immediate successor to a CEO. The average board spent only two hours a year discussing succession planning. Planning should be a current and an ongoing activity: Remember, things will change and so should your candidates. That means you need to keep monitoring potential candidates, whether inside or outside your organization.
  4. It takes more than money to attract the right people. Compensation is, of course, a factor in choosing an executive. But a middle market company does not have the broad financial resources of a multi-billion dollar corporation. Luckily, there is more to life, and work, than money. Many things might attract talent, including corporate culture, possibilities of advancement, vision, and even the opportunity to build professional experience and to address a challenging problem. Look for candidates that will respond best to what you offer.
  5. There will be a learning curve. Instant success in a new position is next to impossible. Succession planning not only considers which candidates might be best and available, but what the operational function will do while the person is getting acclimated to the culture and specific business challenges. The best possibility is to bring one person in before the other departs for a transition period. If not possible, then provide the extra support and resources necessary to keep things afloat until someone is fully up to speed.

For a company with a sustainable business model, change at the top is inevitable. To remain competitive and pursue strategic goals, a middle market company should have an ongoing succession strategy with an eye to changing times and the proper fit between organization and person. If you don't have one yet, it's time to start.

Erik Sherman is an NCMM contributor and author whose work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, Newsweek, the Financial Times, Chief Executive, Inc., and Fortune. He also blogs for CBS MoneyWatch. Sherman has extensive experience in corporate communications consulting and is the author or co-author of 10 books. Follow him on Twitter.