Succession planning isn’t at the forefront of every business leader’s mind, but it should be. If you’re an executive leading a company, you will likely depart at some point.
In an ideal world, you would have that day all mapped out. However, too many CEOs, presidents, and founders left their positions without implementing a succession plan. The outcome often involves a combination of confusion and chaos, leading to attrition and negative publicity.
This doesn’t just happen to small businesses. Howard Schultz formerly served as the CEO of Starbucks — three times. Schultz’s multiple returns to Starbucks highlight the challenges of finding a suitable replacement for a top leader within an organization. Whenever a CEO didn’t work out, Schultz returned. However, this is far from the most effective way to financially stabilize a company after a succession transition.
The truth is, you don’t want your business or brand to fail when you bid farewell. Whether you step away quietly, assume the board’s chairman role, or become an occasional advisor, you want the company you’ve developed, built, and managed to thrive in your absence. In the best-case scenario, you would be missed and never forgotten. However, you would not be irreplaceable. On the contrary, you would have set in motion all the necessary steps to ensure the success of your succession.
What are some strategies to consider as you plan for succession?
1. You can’t start too soon
Most professionals recommend that you begin preparing for your succession at least five years before transitioning out of your role. Five years may sound like a long time, but it goes by quickly. During those five years, you can refine your corporate culture and develop exceptional processes. The goal should be for your business to be able to almost run itself even if you weren’t available.
2. First, look for internal replacements
What occurred when Jeff Bezos resigned from his CEO role at Amazon in 2021? He named Andy Jassy as his successor. Jassy has been an Amazon employee since 1997 and is well-known by everyone. This allowed him to keep Amazon moving forward because he was already deeply integrated into the Amazon ecosystem.
Although you might not have someone to promote, consider individuals already on your staff. Could you mentor or guide them so that they are ready to take your place in five years? If that’s the case, you can avoid the necessity of conducting a global search for a replacement when the time comes.
3. Begin communicating with other leaders as your succession approaches
You don’t want to publicly announce your succession objectives until you are close to handing over the reins. You should start engaging with other C-suite members a couple of years in advance. You should trust these individuals who will maintain confidentiality with your information. They can help you start planning what your succession will look like from both a high-level and day-to-day perspective.
With their assistance, your succession plan should start taking shape and become a workable document they can follow.
4. Show gratitude when you leave
Leaving your business can be an exciting time for you and your colleagues. Rather than leaving without fanfare, consider having a celebration. For example, you could reach out to an awards company and distribute recognition products to individual coworkers and employees. You could also surprise everyone with unexpected bonuses or other tokens of your gratitude.
Ending your tenure positively puts everyone at ease regarding what will happen next. Additionally, it allows you to make a clean break between life before and after succession.
There’s no doubt that succession planning can be challenging, especially if you have no intention of leaving for years. Regardless, investing time in it now will yield benefits later.