A healthy and growing organization proactively plans for succession and transition. It’s simply the nature of business. As my company recently celebrated 25 years, we turned our focus to purposeful succession. I wanted to share with you the key steps involved, the importance of planning and a few things I’ve learned along the way.
1) Get the next generation involved.
As your company grows and develops, it will become increasingly important to begin transitioning leadership to the next wave of leaders. This process will look different for each individual company. For me, it means moving away from our entrepreneurial leaders (generation one) to our professional, internationally focused leaders (generation two).
Be sure to constructively build on the strengths of each generation and tap into the energy, passion and vision of your current leaders to fuel the transition and create an even better future for your business.
2) Shift your board’s focus to policy.
When your board members focus on operations, they are participating in the day-to-day management of the organization. As you prepare for purposeful succession, the focus should shift to policy where they enact and enforce policies, which broadly govern the business. This move helps your organizational governance become more formal through the creation of an entity that protects your company’s health and well-being.
3) Select the next president and
his or her successor.
Your policy board has one critical succession responsibility: to choose the next president and his or her successor. It’s important to remember that the board’s succession responsibilities end with choosing the president. It is the new president, not the board, who has succession responsibility for the executive team.
4) If it’s a family business,
address the family estate plan.
This plan is critical to any successful generational transition but admittedly can be uncomfortable and awkward to deal with. Questions that need answers are akin to personal estate planning when the attorneys ask, “Who gets custody of your kids?” In family businesses, the first difficult question is, “Do we have a competent family member successor, and, if not, who gets custody of the business?”
Purposeful succession plans set the groundwork for the unplanned successions, which is important because once you have carefully laid out your plans, you may think, “What could go wrong?” But, the reality is whether due to illness, disability, death or any number of other scenarios, unplanned succession is a part of life.
When these challenging events happen, they create an extremely high level of emotion, distraction and added workload, in addition to leadership style changes. They also tend to cause anxiety in the organization’s employees, vendors and partners. As a result, in this “unplanned” scenario, these anxieties must be addressed directly and immediately by an already overburdened executive team.
With that in mind, let me leave you with this: The only difference between planned succession and unplanned succession is the amount of time you have to deal with the situation.
In the case of an emergency succession, communication with employees, vendors and partners begins immediately and must be completed within a couple of weeks. In a planned succession, the communication time is only slightly extended to a couple of months. The exact same emotions and distractions are present in both scenarios — the only difference is the level of intensity.
Joseph James Slawek is the founder, chairman and CEO of FONA International, a full-service flavor company serving some of the largest food, beverage, nutraceutical and pharmaceutical companies in the world. For more information, visit www.fona.com.