17 Jan Succession Planning: Get the Whole Story
Many leaders, when they think about succession, have a narrow definition in mind. For example, one owner might be lasered in on who will own shares in the future and whether to sell or transfer them. Another may be preoccupied with who will be the next CEO because she doesn’t see anyone in the ranks who appears to be executive material. These are primary issues and valid concerns, for sure.
But succession is also about how you’ll operate the company in a way that makes future shares worth having. It’s about preparing people to do the work that needs doing so that the organization continues to grow and be viable. It’s about lining up leadership skills with where you’re moving strategically over the next several years and putting a plan in place to develop those skills.
Just ask yourself these questions:
- Has anything changed in your business in the last two years?
- Have the demands increased?
- Are any new skills required?
- Will you have any retirements other than your own in the next five years?
- If so, how will you replace that talent?
- Can you fill open positions without over-promoting people and risking the Peter Principle?
- Do you have the people in place right now to fill key positions without making costly external hires at the last minute?
If you haven’t thought about these issues within the context of succession, you may be planning, but only partially.
Another way leaders miss the boat is that they focus on developing successors (or finding one from the outside), but not on developing the organization.
Business sustainability is all about replacing reliance on individuals with creating organizational systems. (This is one reason why franchises have a high rate of success.) When asked, “What’s your succession plan?” far too many owners answer: “Karen. She’s been working here 20 years and she knows everything that I do.”
But what happens if Karen decides down the road that she doesn’t want to be the CEO? What happens if she gets lured away by a competitor? Or the unthinkable happens and she becomes disabled?
Some leaders tell themselves they’ve planned for succession because they’ve chosen an individual as their successor. But it’s much more than that. Succession means developing the organization and its systems so that if something happens to an individual, the business can go on.
If you’ve been telling yourself that you don’t need to worry because you’re not ready to retire, or you have good people to step in, or you’ve hired a good search firm, or you’ll figure it out when the time comes, take another look. Succession is multi-dimensional. Make sure you’ve got the whole story.