At some point all successful organizations encounter the challenge of key people retiring. Whether they are part of the leadership team or the head of a family business, planning a successful and seamless leadership transition is a major challenge.
Succession planning can be one of the most important processes to ensure the legacy of the organization. Mentoring and leadership programs help potential successors develop their skills, and are useful to the existing leadership in selecting successors. The challenge, however, goes beyond identifying who receives the new leadership mantle. The organizational knowledge, embodied in team leaders and developed over time, is critical for the long-term success, and needs to be conveyed from generation of leader to generation of leader.
Organizational knowledge, unlike data or information, exists within people. This knowledge is derived from their experiences, and it includes elements key to the organization’s success, such as judgment, values and insights. Most importantly, in a succession process, you need to recognize that this knowledge is not easily replaced.
Often, in the selection of a successor, it can take many years to tap into individuals who have the requisite skills and abilities to replace the CEO or a long-tenured employee. The process can be expedited, however, by thoughtfully transferring this knowledge from the current incumbent to the next generation; and the more time and energy that is invested into the knowledge transfer process, the more likely the success of the successor.
The process requires understanding the intellectual capital and competencies needed to lead the organization. It is also requires knowing where the gaps are, understanding the vulnerabilities that could inhibit a good succession process, and, of course, developing specific strategies and mechanisms to close the gaps.
Ultimately, the leader’s role is to take the organization into the future; and in that sense it is one of stewardship, of continuing the health and viability of the organization for the next generation.
A transition process presents an exciting opportunity for a firm to develop new competencies. The next-generation of leaders bring complementary skills and perspectives that can be precisely what your business needs as it seeks to update itself and to continually create value for its customers over time.
And what do the future leaders look like? There are characteristics that you want to look for and nurture in people vying for the next chapter of leadership. You will see in them that:
- They love the nature of the business
- They know themselves, and their strengths and weaknesses
- They want to lead and serve
- They have good relationships and the ability to accommodate others, especially if part of a successor team
- They have earned respect of employees, suppliers, customers, and other leadership team members
- Their skills and abilities fit the strategic needs of the business not only for this time and place, but also for expected future needs
- They respect the past and focus their energies on the future of the business and the industry
The current leadership, in addition to having responsibility for the profitable growth of the firm, also needs to see themselves as stewards carrying the organization into the future, developing and preparing the next generation of leaders to lead.