Succession Planning Complications
This is the first part in a two-part series. Check back next week for how to overcome the unique obstacles to developing a succession plan.
It’s easy to argue for the necessity of a succession plan. On the very surface, creating and instating a plan falls under the categories “it can only help” and “it would be foolish not to have one.” But what can get in the way of doing so? Consider the following scenarios. This is not meant to be an exhaustive list, but rather a collection of complications that we typically see in our field.
The Celebrity-as-Leader: Succession planning becomes complicated when there is a “celebrity-as-leader”: that is, a leader who has very high visibility and who has become synonymous with the business itself. Steve Jobs is the obvious example; Warren Buffet is another. Why? Not surprisingly, there does not seem to be a single answer. In the case of Steve Jobs, he provided a hard-to-replicate element of the company’s vision and brand. Warren Buffet inspires confidence in investors not so much because he is making every decision but because he communicates in an authentic manner and transparently exemplifies his values; as such, people attribute the common sense he exudes to his entire organization. These two individuals do not exhaust the list (after Facebook’s recent IPO, Mark Zuckerberg is certainly receiving a lot of publicity), but they do exemplify how a leader can become “larger than life.” Consequently, it is hard to imagine another person assuming their role without a significant drop-off in performance. Even a well-executed transition to a new leader is no guarantee of success.
The Leader-as-Founder: Complications also arise when the leader of the organization is also its founder, and this can be made trickier still in a family or very small business. Very often the Board, if there is one, is populated by friends, long-time associates, and possibly other family members. The leader-as-founder can, in some cases, navigate these waters with grace, but there are still other cases when straightforward discussion surrounding succession planning is viewed as some combination of disloyalty, lack of appreciation, ambition, or palace intrigue.
The Aging Leader: How is succession planning conducted when the leader is up in age? Many organizations and businesses have policies regarding retirement requirements for leaders, or at a minimum, a time to submit their resignation. But many still have no such policy. Discussion can then sometimes begin among Board members about offering the leader another contract, failing to discuss it in an official forum. This can be very disruptive to an organization, and we have seen Boards halve into supporters of the leader and of succession, respectively.
The “Struggling Business” Leader: The leader of a business that is struggling can view succession planning as somewhat of a vote of no-confidence unless it is an established part of the business. Some businesses that struggled during the recession found it difficult to address succession planning amidst the bad news for just these reasons. One leader asked us almost plaintively, “How am I to lead if the plans for my dismissal are being drawn up in the next room?” When succession planning is just business as usual, it is not over-interpreted when the time comes to undertake the task. But when it is a new initiative, it can be seen as a stop-gap measure, a signal that the business may be doing worse than previously anticipated.
The Weak Leader: A transparently weak leader may view succession planning with apprehension. Much like a baseball pitcher who is having trouble will notice if the bullpen has stirred to life, a weak leader would have to be naïve not to take notice of succession planning as a preliminary step in his or her removal.
With all these complications–and many more unmentioned–how can organizations handle their succession plans most effectively? And what other scenarios have you seen act as obstacles to successful planning?