It’s goodbye to Woolworths from Trevor Bish-Jones, but probably not a farewell to retail. I suspect we’ll hear more of Bish-Jones, assuming he doesn’t decide to sit back and enjoy spending his pay-off.

In the meantime, Woolies chairman Richard North must find himself a new chief executive. It will probably be the most important choice he ever makes at the retailer.

Effective succession planning is crucial to any business, but it’s frequently botched. You don’t have to think very long before you come up with a list of retail examples of the process being disastrously mishandled. The boardroom factionalism at Marks & Spencer in the late 1990s is the most obvious instance.

But you don’t need to cast very far for instances when succession planning has been done most effectively. Tesco’s promotion of Sir Terry Leahy was smooth as glass and the retailer’s track record since is evidence that the right decision was made.

So how can retail boards get the process right? Top headhunter Fran Minogue of Heidrick & Struggles spoke on exactly that at last week’s BRC conference.

She observed that, contrary to what some might expect, private equity-owned retailers have been among the most forward thinking. The promotion of Carl McPhail to New Look chief executive was seamless, while Mike Shearwood’s appointment as Mosaic deputy chief executive prepares the ground for the day when Derek Lovelock either stands down or becomes chairman.

The context in which public company bosses work is very different. Back in 1995, only one in eight departing chief executives were forced out. By 2006, one in three left involuntarily. The average tenure of a FTSE 100 chief executive is less than five years.

Minogue highlighted seven steps for effective chief executive succession. Some may be too late now for North, but other retailers might find them helpful:

> Start early
> Engage all stakeholders in sequence
> Define the selection criteria clearly
> Explicitly decide on the mix of internal and external searching
> Assess the candidates thoroughly
> Define the roadmap and development plans
> Plan support for the eventual transition

Crucially, any new chief executive should be appointed on the basis of the challenges a company faces over the next five years, not just for what might be top of the to-do list today.

In the case of Woolies, the biggest five-year challenge is probably the same as it has been for much of the past five: where does the retailer fit in today’s retail environment and what can restore its retail success?

Bish-Jones tried hard to find the answer, but it ultimately eluded him. Who will be next to try and turn around one of the stores industry’s most venerable names?