There comes a time in every successful executive’s life when they need to start thinking about who will replace them when they finally hang up their gloves and enjoy a well-deserved retirement. It may be a daunting thought at first, but with the right preparation, it can be a smooth transition, even if it’s not going to happen for another 5 or 10 years. Here are some considerations to make before choosing the best candidate for the job.

Hire Internally

Research carried out by professors Rakesh Khurana and Nitin Nohria at the Harvard Business School indicates that when a CEO retires, it is best to find an internal replacement. They studied the hiring practices at Fortune 200 companies over a 16-year period and charted the impact on operating returns to measure the companies’ performance.

Their study showed that when companies hired externally to replace a retiring CEO, there was a 6 percent drop in performance. However, when a company hired internally, no statistical significance occurred. This shows that an internal replacement allows a company to maintain its performance.