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Succession planning<\/p>\n
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Succession planning can be one of the most important ways to protect the longevity of your business. Unfortunately, far too many leaders overlook its importance. The result is never good\u2014and can end up as a publicity nightmare.<\/p>\n
Take the recent case of what happened at Disney. For 15 years, Bob Iger led Disney as the powerhouse brand\u2019s CEO. When he was ready to step aside in 2020, Bob Chapek took his place. The only issue? Iger apparently wasn\u2019t really ready to step aside at all. Instead, he installed himself as the executive chairman directing the company\u2019s creative endeavors and chairman of the board. Within two short years, Chapek was ousted, and Iger returned.<\/p>\n
Though there were numerous reasons for Chapek\u2019s departure, a lack of proper succession planning probably tops the list. Reportedly, Iger had great mentorship<\/a>. He was supported and groomed for his eventual promotion to CEO. In contrast, Chapek never received that kind of trust-building mentoring<\/a> from Iger or many of his C-suite peers. Is it any wonder that his tenure soured quickly and led to major headlines that now serve as cautionary tales for other businesses?<\/p>\n If even the House of Mouse can be brought down by poorly handled succession planning, it\u2019s possible for any company to stumble when trying to replace one leader with another. To avoid becoming better known for your succession plan mishaps than your operational wins, you\u2019ll want to know the most common mistakes to avoid. Below are three big stumbling blocks and how to bypass them:<\/p>\n 1. Waiting until you need a leader to plan.<\/strong><\/p>\n We often talk about the truism of \u201cdeath and taxes\u201d being the only things you can count on. But you can count on the fact that your leaders will churn one day. Whether this is because they resign, retire, or sadly pass away, they won\u2019t be at the helm forever.<\/p>\n The last thing you want is to have to make a knee-jerk decision on how to replace a CEO, CFO, or other leader. That\u2019s why you need a well-considered succession plan. The plan will serve as a map that you can follow. You\u2019ll be glad you have this framework laid out in advance because succession isn\u2019t as simple as just posting a job listing and interviewing candidates. The process can cause ripple effects, such as waning stock (if you\u2019re a publicly traded company) or fearful or skeptical employees who tender their resignations.<\/p>\n According to research from Gallup, around one in two people have quit their jobs due to conflicts with leadership<\/a>. Therefore, be sure your succession plan includes how and when you\u2019ll communicate decisions to workers. You have to walk a fine line between confidentiality and transparency so your high-performing team members are less inclined to say goodbye and leave your new leader with a sinking ship.<\/p>\n 2. Neglecting the importance of cultural alignment.<\/strong><\/p>\n Every business has a culture. This means that the CEO who might be perfect for one company might be absolutely wrong for another. It\u2019s not a reflection on that person but an illustration of how important cultural alignment is to your succession planning. You never want to make someone in charge if that person is doomed to feel and appear out of place from day one.<\/p>\n Sarah Woods, head of office of BTS Boston, an advisory firm that partners with executives and their teams to shape how leaders engage and align the organization to drive results, stresses the importance of evaluating possible replacement leaders according to how they\u2019ll be received culturally. She cautions against assuming anything in this area of succession planning. \u201cWhile you may feel you \u2018know it when you see it,\u2019 that approach is a high-risk gamble for guiding all the stakeholders to find the right culture fit,\u201d writes<\/a> Woods. \u201cClarifying and documenting your unique leadership culture\u2014the best and worst of\u2014and what it looks like in action are important parts of the selection process.\u201d<\/p>\n Admittedly, searching for someone who will slip into place effortlessly from a cultural perspective will take time. Meanwhile, you might have to make do with interim leadership, such as keeping on an ongoing leader, allowing your board to make decisions temporarily, or enabling a team of C-suite executives to steer for a while. Your patience will pay off in the long run because you won\u2019t find yourself with someone whose views and objectives run in stark contrast to everyone else\u2019s in your company.<\/p>\n