Jobs are temporary. Businesses are sustainable - a well-run business can pass from generation to generation and continue to thrive.
To accomplish this, management needs the correct perspective. The question for all of you business owners is this: Are you only concerned about your reputation? Or obtaining a good living for you and your family? Or are you also interested in providing for those who work for you (and the communities in which you serve)?
Does your succession plan primarily consist of finding another business with which to merge? Or are you developing your new and emerging leaders for what lies ahead?
Do you see soft-skills training as an expense to be managed and kept to the minimum possible? Or do you embrace it as a cornerstone philosophy?
If you chose the correct path, you build organizational depth and strength. Too often, the other path leads to failure.
If the succession planning process is something towards which you feel intensely committed, you’ll want to clarify the right (and wrong) approach to engaging in it.
Our team at Leading With Courage? Academy has several thoughts and ideas to help.
When you’re doing succession planning, you can’t just focus one level down from the Owner and his or her direct reports.
Plus, you can’t have the same person filling 17 slots of responsibilities on the succession-planning chart.
We’ve seen two extremes. The first is not preparing any succession plan and, at the other end, a plan that looks out 27 years.
That’s not a typo. One of our clients boasts how their plan covers the next 27 years.
We recommend to our clients that their succession plans cover the next three to five years. (This is as about as far into the future that anyone can reasonably see and predict.)
It’s also the amount of time it takes to prepare future leaders for broader, more complex roles and ready an organization for a smooth transition.
You can’t only look at a succession plan every five years or in the most tragic and dire of circumstances — such as when the CEO is diagnosed with late-stage melanoma skin cancer (really happened).
That’s not the best time to look at a succession plan. Instead, we encourage our clients to look at updating their plans annually.
Now, you might be wondering why we’d need to keep coming back to the plan every year after solidifying it. Don’t we already have a concrete roadmap to succession?
Yes. We do. However, the world doesn’t stay in place just because of what we scribble on a piece of paper.
If you have four founders in your firm, you’re probably not anticipating that one of them, in his late 50’s, is going to die later this evening in his hotel room (again, this really happened). But you should plan for such grim occasions.
You probably do not think that a member of the company’s C-suite is at risk when she goes in for a routine checkup — only to find out the next day that she ended up having nearly 10 hours of brain surgery.
Unfortunately, she won’t be coming back from that. You didn’t anticipate that. But you should consider it. (Really happened, again.)
A CEO abruptly leaves.
The founder suffers a stroke.
A husband-and-wife co-owner team prepares for a divorce.
A manager engages in inappropriate behavior, making him or her so toxic to the business that they have to leave.
Many of these are the types of things a leader could never see coming. But events like this happen all of the time; they aren’t going away. They need to be dealt with for the firm to have a chance of making a successful transition of leadership.
How are you going to smoothly replace her, so the new business pipeline continues to flow? What if it’s a person who handles your top three customers?
What’s the plan to instill confidence in those customers that the next person will continue to deliver the same outstanding level of service? How will you make it clear that “we value your relationship with us?”
If you don’t think you need to plan for these eventualities, maybe this fact will help change your mind:
Up to 70% of widows leave their wealth management advisors within one year of the deaths of their husbands.
Think about this as if you were the general manager of a pro football franchise. You’ve made great plans for getting your team to the next level, which includes drafting a superstar quarterback. Sure enough, you draft that kind of special talent, and it’s clear that he’s going to take you to the playoffs and beyond.
Then, during one of the last games of the season, he has a horrific injury. It’s so bad that the team physician says he may never play again and if he does, he won’t be anything close to the player he was before the injury.
Do you head back to the draft? Do you find someone in free agency? Is the backup quarterback to your starter the real answer all along? Some combination of these?
One thing’s for sure: Without a plan, that team is just going to hope that things just fall into place magically on their own. Which is no plan for succession (or success) at all.
Yet, that’s exactly what too many firms do.
They say, “We’ll be fine. This will pass.”
Unfortunately, the issue won’t go away. Promising talent can leave the company for greener pastures.
Managers and initiatives can foster customers change, and those changes often alter the business/customer relationship. Hoping to be acquired or merged into another business isn’t a plan for addressing these sorts of issues. It’s one that cedes control of them to others.
You can’t push off succession planning conversations for someday and go about business as usual. “Someday” will never arrive at a time that’s convenient for your schedule.
We always need to keep in mind that if you aren’t going somewhere, your best people will.
Wondering where to even begin with the succession planning process? You have to know who your best high performers are and how they step up to seize opportunities before them.
We cover these in our Leading With Courage Academy? Workshop. In two days, you’ll have the practical tools and processes to immediately begin building your plan.
Identify and groom the next generation of leadership. Be prepared for change — not shocked by it.
Editor's Note: Interested in Growing Your Business? Learn about sustainable growth techniques from the experts at Financial Poise.
Lee Eisenstaedt is the Co-Founder of the Leading With Courage℠ Academy and author of the Amazon best seller, "Being A Leader With Courage." Lee helps new and emerging leaders make a bigger impact, sooner by increasing the self-awareness of their strengths and blind spots through the Academy’s assessments, workshops, and executive coaching. He has also…
Six Ways Private Equity Can Play a Role in Retirement Plans
Digital Assets Estate Planning
What Is the ROI for a Private Company Board of Directors?
Committed Leadership: Are You the Chicken or the Pig?
When Is it Appropriate to Take on High Interest Rate Debt?
Cybersecurity Challenges for Boards of Directors