Tuesday, July 5, 2016
The national election cycle is in full swing, and the world is watching the coming transition of leadership in the White House. What about your organization? Are you prepared for the critical leadership transitions that your business family will face in the not-so-distant future?
Successful transition planning for the next generation of leadership is more than just replacement planning. Too often, the plan is simply to name a backup person to fill in when a need arises or take over the position when the predecessor can’t do it anymore. This may work for covering an illness or vacation, but it will not prepare the business, the family, or the individual for future needs, responsibilities, or opportunities in a changing business climate.
There are a number of factors to consider in preparing the next generation of leadership:
1. Roles and Responsibilities. Accurately determine what roles and responsibilities are essential for the organization, difficult to replace, and will need to be transitioned in 5 – 10 years.
2. Knowledge, Skills, and Abilities. Define the knowledge, skills, and abilities needed in those positions both now and in the future.
3. Current Talent Pool. Examine the current talent pool of individuals in the family and the business to understand potential options for future leadership. Be sure to turn over every rock: there may be unrealized talent that has not been previously considered or has not had an opportunity to develop.
4. Development. Proactively prepare and develop the talent pool for future needs, responsibilities, and the changing business climate. A well-defined development plan can be an important tool in developing the next generation of leaders. To be effective, development plans require thoughtful planning, diligence, and follow-through.
5. Preparation. Prepare the family and the business for the next generation to assume leadership. Help the future leaders earn the respect of the family, the business, and outside stakeholders.
Honestly discussing the critical issues facing families and family businesses in transition helps foster the objectivity and focus needed for long term success. Successfully navigating the transition of leadership for both family members and key non-family members often means the difference between prematurely liquidating the business and creating a multi-generational family business legacy.