by Denise Harrison, President and CEO, Strategic Planning and Execution, Spex, Inc.

“What do I do now?” a question from a perplexed and saddened CEO. His chosen successor had recently been diagnosed with a terminal illness; the CEO had to face the question of succession planning again.

Many businesses struggle with succession planning:

• some have leaders who do not want to turn over the reins’
• some chose successors due to filial relationships or political reasons,
• some believe that business ownership and leadership are synonyms.

Others have a succession plan and then find the chosen successor is no longer available, and some think succession planning is just for leadership positions. What should you consider when developing a succession plan?

Solutions

Succession planning often gets visibility at the top of the organization; however, you also need to assess the vulnerabilities that exist beyond leadership roles. Often disruption in critical positions can create a short-term crisis. In addition, it is important to have a pool of candidates rather putting all of your eggs in one basket.

Know what is required now:

A first step is to understand the current job requirements – sounds simple? Do you have current job descriptions for each position, not just for the leaders? Recently I sat down with an associate to review her job description. I found that it had not been updated since she joined the company and did not reflect her current responsibilities. In fact, it had little resemblance of what was actually being accomplished.

When we discussed the changes that had to be made to update the job description, we had an excellent discussion of priorities and additional responsibilities that needed to be added as we moved forward as an organization. These changes enabled us to have a good discussion concerning reasonable candidates for succession planning in this critical, but non-leadership position.

Still, it is not enough to identify current and near-term requirements, it is also important to understand the requirements of the future. This is where strategic planning becomes important to the succession planning discussion.

Strategic Planning and Succession Planning

In order to develop an actionable strategic plan, you must have a clear vision of the future course and direction of the organization. Your succession planning will support your strategy and your succession planning candidates should be able to fulfill the current and future job requirements. For example, will your successor need to understand how to do business in international markets? Will he/she need to have an understanding of how social media can raise your company’s visibility? (Think how President Obama used social media to raise significant amounts of funding, leaving some of his competition in the dust.) A robust strategic plan enables you to identify the key skills sets that will be required of future leaders.

Execution

For each position you need:

• An accurate current job description
• An accurate vision of how the job requirements will change in the future

Once you have these, then you should identify:

• Internal candidate(s) who can be groomed for each key position
• External candidate(s) who might be considered for each key position
• A “blue sky” candidate who would be perfect for the position, if he or she could be hired

Next, you should:

• Identify the perceived pluses and minuses of each candidate

o   Where gaps have been identified

o   Ways to fill the gaps (training, mentoring)

• Have an honest discussion of the aspirations/expectations of the incumbent in each key position and/or the potential candidate(s).

These discussions will enable robust thinking around succession planning and allow the employees to explore their own aspirations and career goals. Through these discussions you will be able to evaluate your employees understanding of the strategy and whether or not they are positioned to take it to the next level.

What about the CEO?

The CEO should go through the same process and review his thinking with the senior management team. Sometimes it is not appropriate to share ideas on internal candidates, but reviewing current and future job requirements with the team will enable team members to provide input as to what the CEO is not be doing that he/she should be doing (or what he/she re doing that he/she should not be doing). Team members will also be able to input additional requirements for the future.

The CEO must be open to suggestions as to the current and future role of the CEO. Yes, the CEO may even find some attributes or capabilities that he/she is lacking. (You can’t be great at everything!)

You should run your thoughts by your Board to see if your thinking is consistent with where they see the company going. If you do not have a Board, consult your outside advisors – accountants, consultants, legal team – to see if they have additional insight into job requirements and/or people who might fit into the succession plan.

Once you have identified potential candidates, you should begin to mentor the candidates so that he/she is ready when the time comes. That said, you should have more than one candidate so that you have a plan B in case your top pick is not available to move into the slot when the time is right.

Next Steps

During this process you will develop:

• Training requirements for current and future leaders
• Job descriptions
• Hiring needs
• Finally a good succession plan

The succession plan should give alternatives so that each position has more than one successor in mind.

Moving forward, you should answer these questions:

• Do you have an actionable succession plan?
• Is the succession plan consistent with your strategy?
• Do you have plans to shore up your succession candidates through training, mentoring, and experience?
• Are you better positioned for succession than you were one year ago?

Many of you have already developed succession plans for your company. What have you done that has worked? What will you be doing differently as you move forward? What are some barriers to developing a succession plan at your company?

Denise Harrison is President and CEO of Spex, Inc.; Strategic Planning and Execution. She has extensive executive experience and consulting experience working with clients in a wide variety of industries and company sizes. She can be reached at harrison@thestratplan.com or 910-763-5194.

Copyright 2014 by Spex, Inc. Wilmington, NC — Reprint permission granted with full attribution.