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NewsOct 11, 2019

Forbes’ Tips for Creating a Winning Succession Plan

Sarah Barber

Does your company know who will take over after your current CEO moves on? Recent research shows that 50% of companies with over $500 million in revenue don’t have a secure succession plan in place.

As startling as that statistic may be, it’s easy to see how this can happen – CEO’s get busy with client and employee demands, leaders move on unexpectedly, and the time and difficult decisions required to establish a succession plan get pushed to the back burner.

But the consequences of not having an appropriate plan in place are severe. You leave your organization at risk of not having the knowledge, leadership, or infrastructure to keep moving forward without you.

An old Chinese proverb says, “The best time to plant a tree was 20 years ago. The second-best time is today.”

For those who are considering how to develop their own succession plans, Forbes contributor, Serenity Gibbons shares five succession planning steps, highlighting Credera’s recent CEO transition as an example of success.

1. Start early – years early.

Gibbons suggests giving yourself plenty of time to prepare. Don’t wait until you’re forced to think about a plan.

Gibbons states, “Credera, a management and technology consulting firm, took a long-term approach to its recent CEO transition. It began with the appointment of Justin Bell as president years ago, transitioning responsibilities gradually until Justin took the reins as CEO.”

“The strategically timed transition of leadership set the organization and its culture up for success as it continued to grow.”

2. Get multiple people in the pipeline.

It’s unwise to put all your eggs in one basket – manage your risk by preparing several potential successors.

“CEOs are all about risk management. Cross-train potential successors at the senior, mid, and entry levels.”

3. Prioritize culture over skills.

Skills can be learned – culture isn’t so easy. Make sure your next leader embodies the values of your organization.

Gibbons shares, “In fact, candidates who ‘get’ the culture but are challenged by transition tasks may actually find greater fulfillment.”

4. Digitize your expertise.

With all you’ve learned as the leader of your organization, it can be overwhelming to think about transferring that knowledge to the next leader. One way to assist with the handover is to create a digital curriculum.

“Although you don’t have to go to the trouble of setting up your company’s own ‘university’ program, digitizing your lessons is a great way to make sure they’re accessible after you leave.”

5. Get candidates closer to clients.

To gauge a potential successor’s readiness to lead, Gibbons suggests evaluating how they’ve proven themselves through client service. Key development happens as leaders spend time with their most important stakeholders – the customers!

“Think about your key client relationships, and test candidates by asking them to manage those accounts.”

Continue reading the full article here.

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