9 minute read
How To Think About and Achieve Succession Planning
by Phyllis Weiss Haserot
Often overlooked among the pressures of the day, until it becomes urgent, is succession planning and client/customer transitioning. For several years succession planning has ranked at or near the top of priorities in surveys of senior management and HR professionals. Yet the response that only about 30 percent are actually doing something about it, has seen very little uptick all those years in both good and bad economic times.
Well, if there were ever bad times, we are in them now, in both public health and economic terms, and the urgency for succession planning has never been higher in our lifetimes! Change affecting just about everything turned on a dime in a few weeks because necessary planning was ignored for years. We have seen that denial is not an effective strategy.
The “Why” of Urgency
Change happens, like it or not, and you want to be in control. Time is necessary to instill trust and confi dence in the designated successor and to be sure the chemistry is right. Companies need to put an institutional process in place in order not to lose customers and highly valued talent when a transition and succession must occur. Succession planning is crucial to avoid business disruption and to retain the value of the brand. So, it needs to be a continual part of your business strategy.
Ideally the succession planning and gradual transitioning for any critical position should be a five-year process whenever retirement of the incumbent can be anticipated well in advance. Two years at least is required to have the transition securely and confidently in hand. When succession is necessary abruptly owing to illness, death, defections to another company or personal preference, much less time is available for planning and preparing successors, but the same steps apply at a speedier pace.
Triangular Approach
Transitions are an emotional experience. It is important to acknowledge that and build in sensitivity and flexibility. It’s often hard for the incumbent to let go, or there is a sudden illness, death or voluntary departure. All are emotional experiences, even if the baton passes to a family member, in fact, often especially if a family member is the chosen successor.
The first step toward sustained success is to integrate succession planning into the business model. It’s not its own separate silo. When the need for transition can be anticipated, which often happens in family and other closely held businesses, the process involves the incumbent, the protégé/ successor and the customer or other key stakeholder. It needs to be carried out very intentionally, planning with the customer or team for the eventual transfer as seamlessly as possible.
Cross-Generational Considerations
Conduct dialogues with younger generations, whether family or unrelated executives to develop flexible, transparent, and collaborative approaches to transitioning customers and assur ing the same or higher level of service delivery and solid relationships. Their voices are important and need to be heard—even if uncomfortable at first —for sustainable businesses.
Given the small X Generation, there is the possibility of a Gen X leadership gap. There are big boomer shoes to fill, and some Gen Xers may not want to make the personal sacrifices the boomers have made.
Companies and Gen Xers within them need strategies to encourage the older generations, usually boomer leaders and managers today, to mentor, coach and otherwise prepare the next generations to meet client and customer expectations. Often this does not come naturally between those two generations, with boomers often not wanting to leave their position and relationships and the Gen Xers frustrated with the long wait to take charge. It’s important to get quite familiar with generational differences in work/life priorities and work structure. Meaningful intergenerational conversations are crucial when divergences arise to sort the issues out and resolve conflicts as soon as possi ble. That’s why a company policy and advance planning is so necessary.
Essential Steps for Success
Maintaining a thriving business and valued reputation requires ongoing succession planning. • Practice transparency in planning and implementation. • Make customer retention and satisfaction a top priority. • Provide for training, coaching, mentors and sponsors. Look at all critical roles, not just the top ones. Don’t stop with the succession “plan.” Success is in the execution. Couple the plan with continual, prompt knowledge transfer. Pay attention to fair compensation for transitioning.
To preserve a positive brand reputa tion, generational differences need to be embraced and bridged to convey a consistent brand of business development, service delivery and customer transi tioning from generation to generation.
Breaking Through Resistance to Succession Planning
Resistance to change is inherent in most people’s nature. It’s uncomfortable, especially when outcomes are unpredictable or require giving up something valued or ingrained.
Even in small companies, succession planning is not merely an internal function or for top management positions only. Client-specific needs and personalities are key considerations.
Below are questions leaders and key relationship holders must ask and answer. • What is the cost to the company if succession planning and Ideally the succession planning and gradual transitioning for any critical position should be a five-year process whenever retirement of the incumbent can be anticipated well in advance.
knowledge transfer is not an integral part of the business model and business development plan? How do we manage the expectations of key stakeholders who are getting concerned for the future that responsible (key relationship) managers are aging? Is knowledge being transferred regularly from one generation to another so that key assets of your business are not lost? Are there (financial and non-financial) incentives or disincentives for knowledge transfer? What are typical obstacles to knowledge transfer (including
Common Fears through Generational Lenses
Knowing common fears of each generation regarding retaining their status and progress in the company and industry provides insights on the emotional obstacles and how to make transitions less threatening. Some of those fears may be:
For Boomers
• Fear of loss of professional identity and value if they relinquish customer and other stakeholder relationships. • Accustomed to hard work and status that fuels their self-esteem, those without strong outside interests may lose confidence in their personal value and ability to keep working. • Fear of losing social connections and compan ionship of people they work with. • Financial loss.
For Gen X
• Fear that their company will lose customers if they don’t see a clear and satis factory plan of succession and transition. • Inability to progress as leaders and maintain a strong base of influence. • Hindrance to their empowerment to enact innovation in practice and company policies. • Competition from younger generations with untried ideas the Xers are uncom fortable with.
For Millennials
• Not moving up as fast as they would like. • No clear expectations about career path. • Not being given a voice in decisions affecting them and culture changes they desire.
For Gen Z
• Loss of mentoring opportunities with someone they respect and have a work ing relationship with. • Uncertainty about their career path and the direc tion of the company.
relationships) that we need to address? How can we get our senior professionals/executives to start planning for transitioning if they are reluctant to let go? What do we do if current leaders don’t have confidence in the next generation as leaders? What differences can we easily bridge if addressed early? What options does the business have without succession planning?
Action Steps
Simply involving the various immediate stakeholders in the process is not enough. Break down the silos by having the discussions across both generations and functions. You can get valuable input from a variety of
sources. Consider outside the box ideas for unpredictable times and a multi-generational workforce. • Use client/customer service teams when possible to build relation ships at many levels. • Include administrative and information technology person nel to support change, transition and successors’ needs. Those are important positions for imple menting any transition and getting their buy-in early on is valuable.
Include marketing/business devel opment personnel in the selection and preparation process. • Include younger generations in establishing criteria for future needs. This is essential! No longer can management assume that the ways of the past will work for a younger, multi-generational and multi-cultural workforce and the changing demands of the marketplace. • Increase the number of qualified women, minorities, and younger leaders as successors at vari ous levels, and make the roles appealing to them with strategic and meaningful responsibilities.
Give recognition and rewards in accordance with their value to the company. • Provide professional development as needed to achieve their potential. • Compile best practices from your firm’s experience and other models from successful companies in and outside the spring manufacturing industry. Keep evaluating what works and what does not and tweak it.
How to Make Succession Planning Less Threatening and More Doable The Strong Business Case
Without thoughtful succession and transitioning planning, entities can stand to lose: Customers; personnel; professional talent; crucial knowledge; and profitable allied relationships.
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• Discuss changes demanded by clients and how to secure relationships. • Involve clients in a structured gradual transitioning process to enable greater certainty and avoid surprises. • Revise compensation systems to provide for fair transition compensation. • Create bridge roles. • Give tangible respect to people who go through transitions and role shifts so it’s not perceived as a demotion. Make planned succession and role shifts part of the culture. Have a clear systematic process for succession and transition ing planning so it is anticipated and accepted as part of being a company citizen. Do periodic evaluations of the results and modify as needed.
Some people who have reached senior positions see succession and transitioning success as part of their legacy. In any case, it’s very much influenced by organizational culture. A boomer team leader at a professional firm with loyal employees told me he feels successful when, and because, colleagues in all roles and levels are moving up. Transitioning and perpetuating the firm are a big part of the culture and are generational factors.
Set expectations from the top as to succession criteria, whether there should be term limits, and how the succession planning process will operate over time. Start well in advance of expected succession needs when possible by having an ongoing process. This will increase retention success and calm client concerns on changes.
Clear expectations and an open process will help to reduce the emotional element and debilitating anxiety and better enable people to plan their careers and lives. n
© Phyllis Weiss Haserot, 2020.
Phyllis Weiss Haserot, president of Practice Development Counsel, helps companies solve their intergenerational challenges at work as a consultant, facilitator, speaker and author. Her most recently released book is “You Can’t Google It!— The Compelling Case for Cross-Generational Conversation at Work.” Contact her at https://www.youcantgoogleit.com or pwhaserot@pdcounsel.com.
