Many business owners and high-level executives avoid thinking about succession planning for their organization’s leadership positions – or if they do, it’s often just a name for their next CEO. But if succession planning is put off for very long, or is too small in scale and strategy, organizations may find themselves scrambling to fill crucial positions at the last minute. Here are some factors to keep in mind when developing your organizational leadership succession plan.
Reassess your strategy
Before you start planning what positions need successors in place, take time to review how a position fits in with your organization’s strategy both now and as you expect it to be for the future. It may become apparent that your organization’s needs have evolved over time due to changes in the company, its environment or its objectives. For example, in some industries, positions that were at one point indispensable have become less critical because of technological advances. Banking illustrates how the need for bank tellers has decreased greatly as a result of the shift to online and mobile banking. In other words, how does this position help your organization get from where it is now to where it wants to be in the future?
Clearly define position requirements
Once you have decided which positions must have successors in place, it’s time to identify the specific responsibilities the role must meet. The needs of the role may have changed – or are going to change – from when it was originally created. You won’t find – and may not even want – a clone of the person now in the role, but the successor must be able to fulfill all or most of the current and future requirements of the position.
Consider what would happen if the position wasn’t currently filled. What critical organizational needs would go without being addressed? What departments would be lacking leadership? You may even find that the position could be filled by dividing the responsibilities and distributing them among current employees.
Be thorough in your selection process
If a leader or critical contributor notifies you of his or her intention to leave and you don’t have a successor in place, you’ll feel pressured to fill the role immediately. The easiest way to avoid this is to have a succession plan already prepared. However, if you do find yourself in this situation, don’t rush to hire a replacement until you’re sure you’ve found the right candidate. If you’ve conducted a search and you still haven’t found an individual with the right credentials and culture fit, consider filling the role with a temporary placeholder from an advisory firm until you find a more permanent successor.
One or more of the departing individual’s direct subordinates often come to mind when considering a successor. According to TIME.com, 40-60% of external hires are unsuccessful compared to 25% of those hired internally. So while it is usually best to promote internally, do the homework to make sure that’s the right choice, not just the convenient one. It may be tempting to choose someone who already knows the company, but not a good long-term decision if he or she doesn’t have the qualifications to fill the role. This can be especially important to understand if your organization is a family business and the successor you’re considering is a relative.
If you opt to fill the role with someone from outside your organization, remember that you are not only looking for an individual with the necessary skills and experience, but also someone that will be a good culture fit for your company.
Successors who have been direct subordinates of the leader they are replacing have already had at least some exposure to the position and its responsibilities. Successors from outside the organization are at a disadvantage when it comes to knowledge of the position and the company, although they do often deliver the benefit of a fresh perspective in the organization and knowledge of practices from another company or even industry.
If you are able to find a qualified successor before your employee leaves the organization, dedicate time to coaching the successor and introducing him or her to important contacts and experiences. If it will take longer to find a replacement, schedule a time to meet with the departing person and ask him or her to outline critical projects, information and contacts a successor should focus on immediately. Unless the employee is leaving on bad terms, it would be helpful for the successor to be able to call with questions if needed.
When choosing successors for your organization, it is essential that you reassess your strategy, clearly outline the responsibilities for positions that need filled and take the time to be thorough in selection and training. Finding and preparing the right successor is time-consuming, but for key positions it can be a major factor in whether or not your business continues to succeed and grow. You owe it to your clients as well as your employees to fill all leadership positions in your organization with the right person for the job.
For more information on succession planning, please contact Marjorie using her information below.
Senior Vice President
Org. Development & Family Business Services
Marjorie Engle guides clients and their companies through executive coaching, transition and succession planning, organizational analysis, conflict management, and corporate strategy development. A specialist in assessing and developing family councils, advisory boards and boards of directors, she has extensive experience with family-owned, closely held, and public companies across many industries, as well as with not-for-profit organizations.
Engle serves as associate director of the Kansas Family Business Forum, hosted by Wichita State University’s Center for Entrepreneurship. She holds a certificate in Family Business Advising with Fellow Status from The Family Firm Institute, is a certified coach with Family Business Partners, and a certified Change Leader.