There has been a lot written about the need for succession planning, as a strong sustainable business requires the owner to develop such a plan. Leadership transitions affect the entire business, including employee and customer retention. Succession planning requires careful consideration on the part of leadership, but it is as much an art as it is a science. Avoiding the following five common mistakes can help the business owner achieve its goals:
- Confusing Ownership with Leadership – Many people have the mistaken belief that ownership and leadership are inextricably linked. However, separating ownership and leadership may provide greater flexibility in choosing leaders who have the requisite skills to meet the company’s needs.
- Making Succession a Competition – In many cases, succession planning involves identifying several high potential candidates. Although this makes good sense, it also may create unintended consequences as such an environment, if left unchecked, can deteriorate and become destructive. To reduce the risk of this occurring, the leader must manage the process so that it is fair, and be honest and transparent. The leader should reinforce the notion that it is not so much a competition, but rather a process that results in one individual taking the position.
- Keeping the Process a Secret – When your management team is left in the dark as to a succession plan, it creates the impression that there is none, resulting in concern about how the business will continue. This, in turn, may cause key employees to leave. Transparency helps build employees’ trust in the process, and can make disappointments easier for people to handle.
- Failing to Think Outside the Box – Too often, owners focus on developing candidates that they can mold into their own image. Instead of focusing solely on someone who has a similar background to the current leader, successful businesses identify high-potential candidates whose strengths align with the company’s future growth. Don’t limit your options. The next generation of leaders must be equipped to serve the customers of tomorrow, not today.
- Fear of What Will Happen Next – Considering the time and energy that goes into building a successful career, many high-level executives often find that their personal identities are bound up in their jobs. These leaders delay succession planning efforts not due to procrastination, but rather due to fear. They wonder what the process will mean to them as individuals. Rather than thinking, “What will happen to me,” ask the question, “What’s best for the business?” This will allow you to move beyond apprehension and start accomplishing a suitable succession plan.
Leaders should approach the succession planning process from the standpoint of building a leadership legacy—one that is successful and sustainable. Failing to choose a successor or improperly preparing that individual for success can have a dramatically negative impact on a company. What kind of legacy do you want to leave?
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