Sooner or later it will happen. One or more of your key people, probably the one you consider most indispensable, will drop the bombshell: she’s leaving. And you won’t have a clue what to do next. It’s one of the few business challenges that every company will face eventually. Unfortunately, it’s also a task that is usually neglected until an emergency arises, leading to business interruption, political maneuvering, and a host of related problems. Thus planning for succession is a tool every business should have.
Succession planning can be a touchy subject, often involving emotions, office politics, and a reluctance to face reality. While this scenario exists in almost every business, it’s even more prevalent in family-owned companies. Research shows that over 70 percent of family businesses fail to successfully transfer to the next generation. None of us wants to admit our own mortality, so we avoid an open discussion of the process.
Whether your workplace involves family or not, it’s time to take a realistic look at this important tool. A good succession plan, based on intelligent research and best practices in your particular business, is the key to making this process less threatening for everyone involved. Here are three critical steps to get you started.
- Create a template
- Develop a pool
- Implement a stretch
- Create a template. Putting a succession plan in writing is a tool that will take you from thinking about it to a new level of action. Whether you put your template on a white board in your office or a spreadsheet on your computer, here are some of the elements you should include:
- The positions you will ultimately need to fill
- The date when each successor needs to be ready
- The level of urgency for each position, ranging from low priority to panic
- Skills and capabilities required
- A list of potential successors
- Level of preparedness for each successor, ranging from totally unfit to ready now.
- Capabilities that are missing
- Training and coaching plan to provide each successor with what’s needed
- Develop a pool. Once you have the template in writing, you have already accomplished the first part of this step—you’ve listed potential successors for each position you will need to fill. Depending on the size and complexity of your plan, you may want to break up candidates into several pools, based on their levels of potential or ability.
Look for both tangibles and intangibles. For example, if you will be needing a CFO, do your potential candidates have accounting degrees and other appropriate certifications? Then add in the intangibles, such as leadership qualities and interpersonal skills. Don’t just look to the next lowest level when planning for a successor, Instead reach down to the lower levels of your management team. Let those people know they have a chance to move up. You don’t want your promising young talent to be tempted away because they don’t see any growth challenges or upward potential.
- Implement a stretch. Give the people in each talent pool a chance to show off and grow their skills through training experiences, personal coaching, and most importantly with a variety of stretch projects. A stretch project takes each individual outside his or her comfort zone by assigning him or her a project far outside their normal job description. For example, some high potential IT middle managers might be asked to develop a new product launch strategy and sell their plan to top management.
Of course you’ll set your stretch teams up to succeed by providing them with mentors and executive coaches to guide them through the process. Stretch projects allow people to expand their horizons to a bigger picture of the company and their potential within it, while teaching collaboration and leadership skills in the process.
Don’t procrastinate! If you leave succession planning to individual managers, or to chance, your failure factor increases exponentially. Mistakes you make by neglecting this important management strategy can cost you money you’ll spend in recruiting new leaders, to say nothing of the costs of declining morale and lost productivity. Developing a plan before you need one costs little by comparison and it takes the urgency and emotion out of the process.
Copyright ©2005-2017 Joel Garfinkle, All Rights Reserved.
Joel Garfinkle is recognized as one of the top 50 coaches in the U.S., and the author of 7 books, including Getting Ahead: Three Steps to Take Your Career to the Next Level. He has worked with many of the world's leading companies, including Google, Deloitte, Amazon, Ritz-Carlton, Gap, Cisco, Oracle, and many more. Visit Joel online at Garfinkle Executive Coaching. Subscribe to his Fulfillment@Work Newsletter and receive the FREE e-book, 40 Proven Strategies to Get Promoted Now!
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