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Ask four different people what succession planning is, and I guarantee that you’ll get four different answers. AND each one of those people will declare with unmitigated certainty that they are absolutely right! And most likely, they are!
Succession Planning is probably near the top of the list of the most overused business words used today. I know, because whenever someone asks me at a party or event what I do, and I mention succession, my conversation partner’s eyes glaze over. “Oh yah, my (brother, sister-in-law, former partner, financial advisor, ex) does that.” Who can blame them? Almost every second article that’s written in a business magazine these days is about some aspect of the black box that is known as succession planning.
In thinking about it, I’ve decided that it’s a bit like the childhood story about the six blind (sic) men and the elephant. In the story, a king asks all six to describe the elephant. Each of them, having touched only one part of the animal, describes the elephant completely differently. After hearing all perspectives, the king wisely imparts that all are correct, and that it is in the harmony of all views that the true picture emerges.
And so it is in succession. Some will say that succession is all about having people ready and trained to move into leadership roles as they are vacated throughout the organization. Others will say that as long as an estate freeze has been completed, shares transferred, and appropriate life insurance placed (to fund tax), the succession is complete. Yet others will say that as long as there’s someone ready to move into the CEO’s role, then the succession plan is done. You get the picture….six blind men…six different views.
In fact, succession best practices include all of these, and above all, imbue the view that succession planning is a process, not an event, and needs to harmonize a number of factors and considerations. In our experience, there are Five Critical Considerations in planning leadership and ownership transitions.
At their best, outgoing leaders/owners are stewards – setting in place the pieces to assure the best chance of success or “promise” for the next team. Typically, this means creating and executing transition and communication plans, ensuring that decision-making frameworks are established and clear, and ensuring a clear collaborative strategic planning process. However, the elements vary, depending on the organization and circumstances.
There are many different components that comprise succession and not every component fits for every company. So, like the king and the elephant, leaders need to consider all parts of a succession holistically to identify what a succession “looks like” to them and what steps they need to take to succeed.
Oh, and next time you’re at a party and someone brings up the “S” word, and the eyes start to glaze over, spice up the conversation with a few pachyderm puns – they’re sure to be a hit!