Succession Planning for Businesses and not for Profits

Pope Francis has taken over leadership of a powerful global organization. The Catholic Church has the advantage of a centuries old historical tradition for selecting the Pope’s successor. There is a readymade loyal staff of followers to help the new leader transition into the position, learn the demands, responsibilities and mechanics of his new role, and to provide support for the new leader to define and chart his own mission.

Does your business or not-for-profit have a succession plan? In times of crisis, having a procedure and path to move forward is critical to survival of the entity. The emotional demands are tolling; there must be a built in blueprint plan that can be followed in a mechanical way. In a real sense, people will be “going through the motions” while they process all that is happening and the impact it will have on them. Having a pre-established procedure to turn to will be a blessing; those making decisions will have a map to follow.

Some important questions to ask:

  1. Who will make interim decisions until a new leader is chosen or put in place?
  2. Is key information recorded and readily available for the new leadership to reference and use as the organization moves forward?
  3. Has the new leader been trained and groomed to take on the new leadership role? Does the successor know the organization’s core values and mission?
  4. Are the key people prepared to really accept, and support, the transition of leadership?
  5. Will the outgoing leadership be honored and respected for its accomplishments? Has their contribution been recognized and promoted?
  6. Is there a strategic plan to address challenges of the new leadership?

Studies reveal that more than half (55%) of CEOs who will retire before 2018 have not chosen their successor and almost half (47%) of family businesses have no plan to transition leadership if something happens to the company leader. Realistically, it can take years to train a leader. Many situations do not happen in a regular fashion. They need to be in a monitoring position for long enough to see how different situations are handled.

The result may be that a spouse who has not been actively involved in business operations is suddenly thrust into the role of primary decision-maker, a role s/he is ill prepared to take on, especially during the family and emotional crises brought on by death of a spouse and parent.

Why do family business leaders avoid creating a succession plan? Two reasons top the list: reluctance to let go and fear of the disapproval of those not selected as successor. The trait of a good leader is knowing when to leave. It is also being able to resist in the face of pressure and emotional overreaction of family members who are not selected as the successor.