Choosing your successor is not a decision you make overnight. It takes planning, insight and, often times, good fortune. Choosing a successor is about selecting someone who shares your values, your passion and your work ethic. Someone who will not only run the business successfully, but a person who can further your dreams for the business. That’s a tall order, and for many business owners knowing where to begin is often the biggest obstacle.
It All Starts with a Plan
A comprehensive succession plan puts in writing what will happen to the business after the owner is no longer at the helm. In addition to outlining the who, what, when, where and how of an ownership transition, many businesses often use the succession plan to identify the future goals of the company. What does the company want to be in the future, and what is needed to get there? And the company’s future goals are often the best place to start when identifying the successor.
With your future goals in hand, begin identifying the people both inside and outside of your organization who you might consider a candidate as your successor. This is your long list. Don’t be shy about putting any "long shots" on the list either, since you should be open to anyone at this stage.
Then create a successor development plan, a written career path that the successor would follow. It begins with an assessment of current skills and interests of the potential successors. It defines what additional experience, education, training and other professional development must be achieved for each. The successor development plan is based on the future leadership needs of the business, and identifies points of progression from one level to the next. It projects a time frame and specifies resources that will be made available.
The Short List
Based on your work on the successor development plan, you should have whittled down your long list down to just a few candidates. These candidates should have an intimate knowledge of all functions of your company. Ideally, they will have also spent a number of years gaining work experience outside the business. Success and knowledge gained outside of the business fosters new skills, fresh ideas and increased self-confidence. It also gives the candidate an appreciation for the role of leading the business and the opportunity to determine if taking over the business is truly the best course of action for them. They are more likely to take on the role of successor by choice rather than a sense of entitlement.
With your successor chosen, coordinate the company strategic planning and the successor’s development plan with key company managers. Have them participate as appropriate in structuring the plans and make sure they fully understand the impact. It is crucial to have managers supportive of future leadership to ensure a seamless transition when the time comes. To achieve this, your key managers must understand that there is a rigorous process in successor development and selection, not just nepotism or seniority, that will determine who will lead the company.
Support Your Successor
Help the successor find and utilize a mentor outside the business to act as a coach, advisor and educator. This might be a trusted person within the industry — but not affiliated with the company — or a professional career coach. Identify professional development groups, for example, those composed of successors from other non-competitive companies, that they may join to learn from their peer’s expectations, obstacles and best practices.
Also, begin delegating decision making to your successor. While it may be difficult to let go of certain things, it is vital that you give them increased responsibility for the operation of the business. In doing so, you’ll gain more confidence in the successor’s ability, and they will be provided with ample opportunities to learn. And delegating more and more to your successor over time gives you the chance to begin identifying what it is that personally interests you most, so when you do step down, you have a better idea of what the next chapter of your life will entail.
Finally, communicate the choice of successor to everyone in your organization. Be transparent about roles and timelines, and make sure everyone understands and supports the new regime. No successor can succeed without the support of the entire team.