Promoting Business Longevity with Succession Planning
Jan 31, 2023
Kate Keller, founder and principal of Keller Augusta, shares tips with Forbes Business Council on how to set your business up for long-term success with a leadership transition plan.
The United States has long been the land of opportunity, with rumors among early immigrants to Ellis Island that American streets were "paved with gold." For many, making the "American dream" come true meant hard work and an entrepreneurial spirit.
Fast forward many years and much of the American workforce has cultivated a feeling of independence. This is partially a result of the pandemic, as we shifted to an extended period of work-from-home and today's hybrid work schedules. I think we've all felt that moment when we were on our own and making decisions while our colleagues couldn't access a Zoom call due to internet issues or a screaming baby had them muted on a call. The American dream realized!
All kidding aside, before the pandemic, during the pandemic and as we enter the next phase—possibly a recession—demand for talent has consistently outpaced supply. The next couple of years mark a milestone phase of demographics: the youngest Baby Boomers will turn 60 years old soon. With the average retirement year in the United States at 61, the departure of C-suite executives from the workforce could exacerbate an already tight workforce.
So, what's new?
Some Baby Boomers in C-Suite positions are choosing wellness over continuing in the workplace. And the numbers back it up. Nearly 70% of company executives say they are "seriously considering quitting for a job that better supports their well-being," according to a new report from Deloitte and market research firm Workplace Intelligence.
Focus on the long-term.
As John C. Maxwell wrote, "Change is inevitable... Growth is optional." For a company's succession plan to be successful, focusing on the long-term is essential. Challenges will arise at all phases of the company's life, but for the company to survive, leaders must have a plan. To thrive (i.e., to grow), the company must have a strong bench of employees.
To ensure company longevity, organizations must establish a succession plan and put in place a seamless leadership transition—review these plans regularly and especially when changes occur. Knowing that this plan will evolve through business and/or economic cycles can help ensure that the talent pipeline and the company will continue to move forward during the inevitable hiccups. It is important to always have a plan of growth on the horizon—for the company, employers and employees. Planning is key.
Get all hands on deck.
For the succession plan to be an organizational program, it's crucial for leaders to encourage growth into new positions by identifying a person’s diverse skill sets and how to benefit from them. Focus on personal and professional growth. Consider establishing a standard of success and goals, asking questions such as:
- How can you gauge employee satisfaction and development?
- What are the employee’s goals, and how long will it take to achieve them?
- How satisfied is management with employee performance?
- Make sure the action plan is visible, measurable and shared with the team.
Nurture a warm bench of talent.
Recruiting and maintaining great talent over the past few years has been a challenge, to say the least. However, organizations have continued to make strides with a strategic approach to securing talent in the pipeline—and this is crucial for maintaining a strong succession plan.
Drive deeper engagement of managers by enabling them to "own" talent development. The pillars of talent development for each manager could be (1) themselves, (2) existing employees and (3) prospective candidates.
Establish a rotational program to help employees meet others in different departments; this encourages company knowledge sharing. And institute a mentorship process within this rotational program to provide employees with guidance and a mentor to cheer them on and celebrate their successes or provide feedback when needed.
It's incumbent upon the leader to set the course and foster an open, collaborative environment from the start—creating a comfortable space where questions and new ideas are presented to cultivate growth and set the company up for long-term success.
Measurement is key.
The devil is in the details when it comes to succession planning and long-term growth. Jim Harter, Ph.D., Gallup's chief scientist of employee engagement and well-being, agrees: "Measurement is one thing; what you measure is another,” he says. “You can measure a lot of things that have nothing to do with performance and that don't help a company implement a system that allows managers to create change."
Like world history, knowing where your company has been allows leaders to learn from past mistakes or dive deeper into what works. Beyond that, knowing where the company is currently at and where you are headed can help leaders create a guidebook for those employees transitioning out, new hires joining the team and top performers climbing the corporate ladder.