Strategic succession is essential in every work group within an organization, not just CEOs. It touches all aspects of the business: family ownership responsibilities, boards, executive teams, management teams, work groups and even new employee on-boarding.
Here are six key areas that make up a complete and successful succession at any level.
The transfer of knowledge, skills and abilities
The first step in succession is to systematically move competency to the next generation of owners, leaders, managers and workers. This is done through targeted education, new work experiences, exposure to positive and negative results, individual coaching and thoughtful mentoring.
Keep in mind that real succession means that we will have to accept occasional — hopefully brief — periods of reduced performance in order to have a greater future gain.
The transfer of income and wealth
A well-planned upfront compensation program lubricates the wheels of succession. Clarity is important not as a carrot on a stick, but as a marker on the succession track.
The question, “What is in it for me?” is a legitimate and honest one. Planning the compensation transfer in advance keeps engagement high and avoids the distraction of ambiguous promises. With respect to ownership, it includes the well-planned generational transfer of wealth.
The transfer of authority, control and accountability
In the case of a newly appointed department manager, the transfer of the departmental budgeting and expense process must be complete. In the case of the newly appointed CEO, the transfer of the strategic planning process including authority, control and accountability must be complete.
The transfer of these three dimensions truly ensures that the ownership for the work is also fully transferred.
The transfer of roles and responsibilities
Oftentimes, roles and responsibilities are cultural. For example, who opens the meeting? Who sets the agenda? Who speaks first or last? These cultural markers are very important tools that stabilize the culture.
You want the company to improve, change, grow and prosper. At the same time, you want a very strong and steady culture that remains healthy and integrated. Roles, especially cultural roles, become traditions and offer people stability despite the changes that succession brings.
The transfer of people, things and money
We are entrusted with the duty to care for three important “others.” Author Dennis Peacocke says, “We grow by caring for other people, things and money.” I have found that this caring for other people, other people’s things and other people’s money is what best builds our character and is an important action to transfer to the next generation of owners, leaders, managers and workers.
The transfer of risk management and risk elimination
Succession isn’t complete until the risk management and elimination — of both seen and unseen risks — has been transferred to the next generation. Either the successor becomes the risk manager and eliminator, or the succession has not been completed.
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 or call (630) 578-8600.