By Mike Schmidt, AEM Industry Advisor Editor
The transfer of power between leaders as part of a succession plan can be an incredibly trying experience for a company, and the importance of developing and executing a plan to deal with organizational responsibilities changing hands cannot be overstated.
One factor – above all others – determines just how successful a succession plan will be when the reorganization actually commences: the people involved. And while the legal and financial aspects of such an effort are often considered by the vast majority of companies undertaking one, really and truly understanding how to approach leadership succession with employees in mind is critical.
“There is a lot of focus on the technical side of the business, and not as much on time management skills, communication skills, leadership, motivational skills, and that’s where a lot of the time we find the gap,” said Linda Tennant of Phoenix, Ariz.-based Attainment, Inc. – a company that serves to help organizations develop the culture necessary to achieve their goals by working with leaders to implement strategic development to improve both individual and team performance.
Why Succession Efforts Fail
No company looks to fail in its effort to effectively transfer power from one organizational leader to another, yet many do not take the necessary steps to ensure they achieve success. According to Terry Tennant, also of Attainment, Inc., certain factors play more of a role than others in occurrences of failed leadership changes. They include:
- An inability to communicate with, coordinate with and gain commitment and buy-in from people within the organization
- Failure to develop leaders within the company
- A lack of integration between key stakeholders
Fortunately, a company can combat these factors by embracing a willingness to invest time and resources in gaining a better understanding of employee goals and motivations, as well as aligning them with those of the organization as a whole. Doing so is not only the responsibility of the one or more individuals planning to relinquish power as part of the succession effort. Others who will be affected by the transfer of responsibility should also be active participants.
No two people within a company or organization are exactly the same, so it goes without saying they often have different goals and motivations. In order to ensure they become invested in the process to develop a succession plan, company leaders need to take the necessary steps to ensure they get involved.
“If you don’t do this, the next generation of leaders is going to have a very hard time getting everybody on their team,” said Linda Tennant. “It’s not something you just do overnight. One of the things we do is bring everyone together, whether it’s the management team, or as many people as you can involve, and get away from the day to day. And then you go through a process – like a strategic plan.
The Elements of a Proper Succession Plan
By removing key members of the organization from their day-to-day tasks and responsibilities long enough for them to focus their collective attention entirely on developing a succession plan, a company stands to optimize its chances for success when it comes time for implementation and execution.
According to Terry Tennant, the elements of a proper succession plan include:
- A comprehensive written plan
- A legal business structure
- Financial and tax considerations
- Roles and structure
- People development/motivation
- Agreed upon values, vision and goals
- Proper execution
Once the process for developing a plan commences, company leaders (those affected most directly by the succession effort) must take the time to analyze the organization’s most recent accomplishments and hallmarks and use them to outline what values are important to the enterprise as a whole. In addition, it is critical for them to assess company financials and key performance indicators (KPIs) to gain the necessary insights into how they will be impacted by the succession effort.
“Also, you find out what your strengths, weaknesses, threats, trends, opportunities and possible goals are,” said Linda Tennant. “From there then, the group decides, okay, in the next year, what are some things our group is going to focus on. You brainstorm the past, present and future, then you get everyone onboard and engaged.”
After those steps have been taken, company leaders must identify what actions need to be taken to ensure the proposed succession plan can be implemented given the organization’s strengths, weaknesses, threats, trends, opportunities and goals. Furthermore, they should designate each other assignments for those actions to be carried out and put processes in place for tracking and measuring success.
This content was originally delivered as a CONEXPO-CON/AGG Education Session. USBs containing video recordings of all of the show sessions are available for purchase at http://shop.aem.org/c-121-conexpo-conagg-2017.aspx.