Introduction
If you’re considering succession planning, now is the time to act. As a business leader, you know how quickly things can change. This is especially true in times of economic recession or uncertainty, which are unpredictable and can affect almost any business. However, things can quickly become complicated if you don’t have a plan for your exit strategy and early succession before such a time comes. Here are five reasons that show why tackling succession planning early is critical:
What an early succession plan looks like
An early succession plan is more than a list of names. It’s a roadmap for your business and should help you achieve your goals. An effective succession plan should be dynamic, adaptable and include the right people.
When creating an early succession plan, it’s important to remember the following:
- The program must be flexible enough to change as circumstances change;
- The most important thing about developing an early succession strategy is ensuring that all stakeholders are involved in its creation;
- Everyone must understand their role in implementing any changes outlined by this strategy (and why they’re necessary).
Why early succession planning is critical
Succession planning is a critical part of business continuity. It’s not just about ensuring that your company will continue to thrive but also about planning for the future. So naturally, you want to avoid any surprises regarding succession planning, and you can only do that by preparing now.
Succession planning helps you develop new skills so that when the time comes for someone else in your team or organisation to take over from you, they’ll be ready with all they need under their belts already–and, more importantly, able to handle any hurdles thrown at them along the way too!
Early succession planning helps you run a business
Succession planning is about who will take over the company and how you plan to run it. Succession planning enables you to develop a business plan for the future and understand your strengths and weaknesses as a business leader.
It’s important to note that succession doesn’t involve selling your company or retiring! Instead, some businesses choose to keep ownership within one family or a leader within the company while allowing other employees or partners in on the deal later if they want more equity. This can be especially useful if someone wants their kids involved sooner rather than later–and having them learn how things work from an early age will give them an edge when it comes time for them to take over someday!
The importance of coach-mentor relationships in succession planning
It would be best to have a mentor or coach work with potential leaders that will be taking over the rein of the business. It’s essential to find someone who can help potential successors understand what it takes to be successful in an organisation and how to navigate its culture–and that’s something you can only learn from an experienced mentor who has gone through the same process or, better still, the current leader. Mentoring will also give you access to inside knowledge about the business, opportunities, weaknesses and threats; they can tell you about them first-hand. A good mentor will also challenge your thinking by asking questions like: “How would this look different if we did it differently?”
This type of relationship doesn’t need to be formalised; sometimes, all it takes is talking through ideas over lunch once a month (or even more frequently).
Case studies of recent succession planning crisis
Here are four recent succession planning crises in large corporations in Europe, North America, and the Middle East:
- Nissan: In 2018, Nissan’s CEO, Carlos Ghosn, was arrested for financial misconduct. The company’s succession planning strategy was criticised for being too dependent on Ghosn and needing a clear succession plan, contributing to a leadership vacuum after his departure.
- Deutsche Bank: In 2019, Deutsche Bank’s CEO, John Cryan, was replaced by Christian Sewing after declining profits and uncertainty about the bank’s future. The transition was criticised for being abrupt and needing a clear plan for the bank’s long-term success.
- Lufthansa: In 2021, Lufthansa’s CEO, Carsten Spohr, announced his retirement after more than six years of leading the company. However, the airline was criticised for needing a clear succession plan, leading to concerns about the company’s future direction and leadership.
- Abu Dhabi National Oil Company (ADNOC): In 2021, ADNOC’s CEO, Sultan Ahmed Al Jaber, was appointed the UAE’s new Minister of Industry and Advanced Technology, leaving a leadership vacuum. While ADNOC has a reputation for effective succession planning, the sudden departure of its CEO raised concerns about the company’s future direction and ability to maintain its competitive edge in the oil and gas industry.
It’s better to have a plan in place than not.
It’s better to have a plan in place than not.
If you’re not sure where to start, here are some things your business can do:
- First, review your succession plan regularly.
- Update the plan when necessary and ensure everyone knows the changes.
- Keep track of current employees’ skillsets and potentials so that they’ll be able to fill leadership roles when needed most–this way, no one will be caught off-guard when they’re asked to step up into higher positions within the company!
Bottom Line
I hope this article will help you understand the value of early succession planning. It’s much easier to adapt your plan when you have one in place from the start rather than creating one from scratch when things go wrong or change unexpectedly.
Who am I?
I am Dotun Adeoye, a Business Growth Strategist & Author
I’ve built up my experience via serial entrepreneurship, consulting leadership roles in business growth, business development and product innovation in large companies worldwide in the last 30 years.
Today, I consult with large businesses on how to sustainably grow their businesses, sustain infinite growth, and ensure business continuity irrespective of the business climate.
Hire Dotun Adeoye to Speak Virtually or In – Person at your company’s event to cover this or other topics. You can also get in touch via +44 203 097 1718 or dotun at dotunadeoye.com
