by Steve Adubato, PhD
Succession planning. It’s easy to talk a good game when it comes to planning for the future of an organization, but practicing it is a different story. Every organization must have a strong plan of succession and a few leaders ready to step up and take charge when and if the current boss steps aside or is forced out for health or other reasons.
Yet, we find more and more that even in the most sophisticated and visible companies, no realistic and practical succession plan exists.
Q—So what makes succession planning so challenging?
A—There are so many reasons. First, particularly in cases where the leader created the organization, he has a tremendous personal and emotional investment. He often doesn’t want to move aside. He doesn’t even want to think about the possibility. The same passion and commitment that allowed him to work tirelessly to build the organization causes such a leader to resist giving up control. Another reason is that potential future leaders who are talented enough to actually step up and take over, often get pushed out because their presence makes the CEO uncomfortable. Also, boards of directors are reluctant to confront the succession planning issue head on. Board members can be too close to the current CEO and don’t want to go through the candid and uncomfortable conversation that must take place as to “what happens if…,” so they ignore, they punt, they placate and then when the need arises for a new leader to step in, it is often too late.
Q—What’s wrong with a CEO deciding that she knows who she wants to succeed her and responds when asked if she has a succession plan; “Absolutely. Bob is my succession plan. He has been with me for years and knows this place like the back of his hand. He’ll be the guy to take over when I go.”
A—This approach may be fine for a mom and pop shop, but for any organization that is complex, multi-layered and with a number of employees and stakeholders, it is not only simplistic, but dangerous. A successful succession plan cannot be created in a vacuum. It can’t be hatched in the mind of the CEO without active participation from an independent and concerned board. An open, candid and yes, uncomfortable series of conversations must take place with all major parties involved. The pros and cons of potential leaders must be put on the table. Even if the current CEO is convinced that “Bob is the guy”, what happens if Bob is not the choice of the majority of the board or doesn’t have the confidence of the staff? What happens if key stakeholders think Bob is a puppet for the current CEO and doesn’t have what it takes to lead? These are just some of the questions that makes succession planning so difficult, but essential.
Q—Is succession planning any different in family owned companies?
A—Absolutely. As hard as succession planning is in the corporate world with no blood relations, it becomes even more challenging when siblings and old family rivalries come into play. Instead of simply thinking about what’s best for the organization, certain family members may have a hard time separating their strong dislike or distrust for a relative from the organization’s needs. When family is involved, jealousy, history and pettiness become heightened. Family run businesses can be great because everyone feels a tremendous stake in the organization’s success, but, when the time comes to plan for the succession of the matriarch or patriarch, often all hell breaks loose.