A recent client’s problem indicates the importance of establishing a plan for leadership transition. I met Amanda when she was about to assume the role of her dreams. Over the last 15 years, she’d held several significant positions in a midsize firm. Everyone in senior management viewed Amanda as a capable leader with strong strategic competencies and the ability to assess the business landscape far into the future. She is visionary and pragmatic, with a robust track record of delivering outstanding results.
It was no surprise to her colleagues when Amanda was named the successor to James, the company’s retiring CEO who had been in the position for over a decade. James was affable, well-liked and respected by employees, but it was clear to the board that the business environment was changing rapidly, and the company needed a new CEO who could keep pace. From Amanda’s point of view, however, the role transition wasn’t going as smoothly as expected.
“I reached out to James two months before I was due to assume the CEO position to discuss my desire to pull the senior team together for an off-site meeting. I thought it was important to discuss our strategic direction and how we would align as a team. I wanted him to be there to provide a historical perspective because I respect his institutional wisdom. But instead of supporting the idea and contributing to the design of the meeting, James insisted the session was unnecessary, and the current team structure was fine just as it is,” Amanda shared. “I disagree. James is creating roadblocks around anything he perceives as introducing change or compromising his perceived authority. His lack of support is eroding the two-month head start we might have had on annealing as a leadership team.”
Several signals in the interactions between James and Amanda suggest James might not agree with Amanda’s appointment to CEO or is not ready to retire and give up the role. He’d spent a career stepping up but didn’t know how to step down. Regardless, the board’s decision stands, and Amanda will become the company’s top leader. While the organization had done an excellent job in developing Amanda for the position, it had failed to prepare James to support her at this critical time in transition.
Act now to prepare your successor
Too often, organizations think of succession as an event — but it’s really a process. Here are three practical and immediate actions you can take to prepare your successor and the organization for a smooth transfer of power.
Reintroduce the individual to the organization
Your successor assumes a higher-level role in the company, and how you recast the organization’s perspective about that person and their ability to lead well makes all the difference. Even if they are a long-tenured employee, a thoughtful announcement to the entire workforce is one step. However, holding celebratory events around the company allows employees to have face time with the incoming leader and better positions them to hand the baton to the next generation gracefully.
Be honest about the challenges you see.
If you’ve spent multiple years in a position, you’ve likely experienced many business cycles. There were times when revenue came quickly and costs were managed well, as well as downturns in the market or industry. Share the most irritating challenges, the things keeping you up at night. What have you learned about solving them? What questions still need answers? Discussing these issues with your successor may give you new perspectives and insights.
Review the 5 D’s with your successor
- Depth of company financials. What is the business’s financial health beyond the balance sheet? How do your strategic objectives align with the financial models required to achieve them? What new sources of revenue can the company reasonably expect to obtain? What will it take to accomplish that gain?
- Depth of talent. Does the company have a talent pipeline capable of meeting today’s challenges and tomorrow’s opportunities? Where are the talent gaps that need to be closed, and what is your current success rate with accomplishing that goal? Who has valuable skills and experience to offer that are not leveraged in their current role? Share your insights about the skills and competencies the organization will need in critical positions to evolve and prosper. Be candid about the performance problems you’ve yet to resolve.
- Depth of product/service offerings. Your organization may be like the old Kentucky Fried Chicken slogan, “We do chicken right,” but many companies can’t claim that their one product is superior to all others. Therefore, offering a diversity of products and services is vital. What level of success is the company experiencing in product development? Identify any product or service issues your successor will inherit. Provide insight into the products currently in development and the impact you think they’ll have on the business.
- Depth of competitive threats. Any good organization has competitors scrambling to overtake their market lead. Help your successor better understand the threats you’ve been managing. What issue, individual, organization or global shift is of most significant concern? What insight have you gained thus far about how to manage that threat?
- Depth of disruption. Whole new industries have been sacrificed or birthed from the altar of disruption. What level and source of disruption will your company likely face now or in the future? Where can you lead disruption rather than become a victim of it?
Transitioning a new leader to a senior role can be a vulnerable time for any company, internally with employees and externally with shareholders and competitors. Leave a positive legacy by approaching the process as a partnership between you and your successor, where you collaborate for the organization’s good.
Alaina Love is CEO of Purpose Linked Consulting and co-author of “The Purpose Linked Organization: How Passionate Leaders Inspire Winning Teams and Great Results.” She is a recovering HR executive, a global speaker and a leadership expert with Fortune 500 clients. Follow Love on Twitter, Facebook and YouTube or read her blog.
Opinions expressed by SmartBrief contributors are their own.