Many business owners, executives and entrepreneurs have failed to plan for their retirement or for when they are no longer able to handle their job responsibilities. As a result, when something does happen, the company and its employees, clients and vendors will experience unnecessary chaos, uncertainty and stress. Some companies will need to close their doors.
All of this can be prevented by creating and implementing a well-thought-out succession plan now.
Start Developing Your Successors Now!
Business requirements have evolved, along with the qualities required to be successful. When you select your successor(s), it’s important to see beyond likeability, hearing what you want to hear or seeing potential in the person that is not evident to others.
It’s costly to select the wrong person. According to Harvard Business Review, 64% of executives in new positions fail within the first 18 months! (Remember, when they leave, they will take good employees and customers with them!) So, it’s important to get it right the first time.
9 Keys to Create Successor Success
- Job Fitness. Whether you promote from within or hire from the outside, the person must fit the job responsibilities to be successful. (For example, if financial management skills are required and they don’t have the interest and skills, they will make poor financial decisions.) Use a qualified job assessment and a 360-degree feedback assessment to develop and uncover any concerns that need to be addressed now. Developing the successor’s skills and business savvy are required before they receive the new job title and compensation package.
- Conduct Conversations Over Time. Meet at least quarterly and assess the future successor’s values, vision, interests, skills and understanding of the business and industry each time. It’s a great opportunity to mentor, talk over challenges and learn from one another.
- Design a Long-Term Game Plan. The intent is for the transition to be seamless. A customized game plan prepares each successor, so there are no surprises to the company and its employees, customers and vendors. Develop more than one person in the event of life and/or career changes. Update the plan every three years. And, remember, ask each person first before slating them for the position and make sure they will do the work to be ready!
- Executive Coach. Hire each future leader an executive coach to be the person’s confidential sounding board. Relying solely on internal mentors can hurt a successor’s future if confidentiality is broken.
- Outside Experience. It’s important for future leaders to gain the depth and breadth of experience by having worked for other companies, especially if the company is family-owned. As part of the Game Plan, have these potential leaders work in another company environment for five years, preferably in a management role. This will expand their point of view and leadership skills.
- Redefine Job Responsibilities. One year from retirement, review and update job descriptions with the people slated for the new roles. Don’t be afraid to redefine jobs and split the roles based on key skill requirements (e.g., Chief Financial Officer (CFO) may handle financial matters well, but not human resources issues. Break the position into two jobs, CFO and CPO (Chief People Officer).)
- Common Values. This is a critical factor that is often overlooked, particularly when nepotism is involved. If someone does not possess the values or integrity required to run the company, don’t be afraid to say, “no.”
- Step Away. Too often, the person leaving wants to stay and have the successor shadow them. This is not advised since successors lose important credibility that they are unable to gain later. Set aside egos, let go and move forward. (Please note: smart successors will set up quarterly meetings during the first year to meet and talk through issues with the former leader.)
- Let go. Sale of the company is always an option. When emotional attachment is high and there is a strong desire to leave a legacy, this option is often ignored. It can actually be more financially beneficial to all parties.
By creating a long-term succession game plan now, you develop successful successors.
©Jeannette Seibly, 2018
Jeannette Seibly has been recognized as a catalyst for the past 25 years. As an executive coach, speaker and author, she provides straight talk with dynamic results. Are you having trouble planning for the future, and picking and developing your successor(s)? Don’t wait to let go of the reins! Contact Jeannette now for a preliminary confidential conversation.