It has been a while since you last heard from me. I hope you had a wonderful Christmas. I did despite the fact my computer crashed and I virtually lost everything. I failed a simple leadership principle, not having a back up plan. I was arrogant in thinking this could not happen to me. Hubris. According to Jim Collins in his recent book, How the Mighty Fall, hubris is the first stage of decline in organizations. Well, I learned my lesson and now I am regularly backing up all my files and accounting records.
I am humbled by my failure of not having a back up plan. Fortunately, my arrogance will not cause my business to fail, but it has created extra work for me and many hours of frustration re-creating my information. Don’t let this happen to you as a leader. Have a back up plan, not just for your computer information, but who your successor will be in the event something happens to you.
I am privileged to work with many leaders of both large and small businesses in my work as an executive coach. Most do not have a back plan and give a variety of reasons for procrastinating: too many pressing matters at hand, thinking about passing the company on to a new generation is depressing, there is plenty of time, and the current owners will be around for a long time. Sadly, the lack of planning can be devastating to a business when it faces an emergency. Ironically, firms prepare for unexpected expenses by maintaining cash reserves, but most closely-held middle market sized businesses fail to take their risk management any further.
What I am finding is effective succession planning is a combination of both “art” and “science.” Just as it would be difficult to develop and implement a plan relying solely on experience and instinct, it is impossible to do the same without relying on proven strategies. Here are some proven succession plan strategies that you can implement no matter what size company you lead.
1. Succession planning follows your strategic planning process. Succession plans define a company and its successors, whether the latter consists of family members, employees or external buyers. Current leadership develops a comprehensive business strategy that outlines the companies vision, mission, strategies to deal with the competition and customers, plans for changing the way it does business and the identification of the talent the company will need today and tomorrow to meet the challenges ahead. Part of the succession plan identifies the skills, experiences and competencies leaders need today and tomorrow, how to assess these skills, the identification of hi-potential talent to be assessed and a process to development leaders skills using a variety of learning experiences.
2. Creating a robust development experience with an ROI. Great companies continue to invest in their leaders all the time. They create a mindset that their leaders need to continue learn and develop their craft all the time. Creating a development experience to enhance leadership skills and experiences prevents organizations from falling into the trap of thinking they have to accept their successors as they find them with their existing skills and experience. Instead, the succession planning process is formulated around the specific skills and abilities needed to successfully support the company’s strategic, profit-increasing and value-improvement needs now and in the future. The development experience must be customized to your current and future needs. Work rotation, eMBA programs, leadership cohorts working together to solve complex opportunities and challenges and follow on executive coaching need to be considered. The one-size-fits-all, generic leadership training courses tend to be ineffective and usually a waste of money. Create and develop measurements for your development programs to demonstrate a return on your investment.
3. Communicate your succession plans, don’t keep them a secret. Tell everyone. This will prevent employees feeling in a vacuum as to the owner’s intention for the company, and prevent the impression that the firm has no succession plans. Employees want to grow and develop and want to work for organizations that are committed in doing so. By communicating your succession plans to everyone, owners give key leaders and employees a reason for staying and committing to the the companies success. Higher commitment leads to higher engagement, leading to happier clients, and culminating in higher top and bottom line growth.
What is your back up plan? If you have one, good news. Is it static or a key part of your strategy? If you don’t have one, get going. It is never too late to get back up.