Smaller Aspects of Succession Planning

I’ve been on a succession planning panel. The other panelists were a HR specialist and an M&A advisor. When – last in the sequence – asked what was my advice, I said “Have a business to sell.” Yes, lots of business continuity there, but it is also about decisions as a leader you make.

Succession planning isn’t just for handing over the reins of the company from the top, either to a successor or via a sales. There are more nuanced, day-to-day leadership decisions that can cause a very negative impact.

What can look like economic sense from the 30,000ft view can be a disaster at the 25ft view. Letting go of the wrong people can have a long-term economic impact, not just to the bottom line of the company, but also to client satisfaction and succession planning.

One unfortunate aspect of leadership is having to lay people off or fire them. When your business deals in projects or teams, get the team leads involved in the process. It isn’t just numbers. It is all in the spirit of the well-intentioned “what can I do to help?” Consult the heads of the department you need to shrink, especially if it is a knowledge or skill worker you have to cut. If you think, from numbers only, getting rid of the highest paid with the most benefits makes sense, you potentially lose client trust from a well-developed relationship suddenly ended and project advancement with institutional knowledge lost. Both of these things wind up increasing costs.

Succession planning should have a lot of leadership-building in it. Picking the wrong person can be disastrous (see Disney). Leaving the wrong person in charge who makes decisions based on their personal relationships instead of what is in the best interest of the company can be equally disastrous (see Disney, again). The person you pick to have as the successor needs to be the same person you want in 5 years when the company has grown from a $5M revenue company to a $25M revenue company.

Plus have your back-up plan. To make sure your business makes it to 5 years. To make sure that when your heir apparent wins the Power Ball and quits, you know the next in line is going to be a fine replacement. To make sure when you get hit by a bus in year 2 of your 5-year plan, people are ready to go ahead earlier than expected.

Think about these things. Because I do. Or just let me do it for you.