You’ve been running your firm for 30 years, and to be honest it’s getting old. A well-deserved retirement in the Maldives beckons. Time to start thinking about finding a replacement? If that sounds like you, you’ve come to the right place.
To use the buzzword du jour, resilient organisations are the ones that think about the future – but that’s easier said than done. Fortunately, MT has 50 years of experience charting the course of British business, and it’s picked up a few pearls of wisdom along the way.
Primogeniture is overrated
The habit of family businesses to copy medieval kings in the way they chose successors might need rethinking. ‘It is possible that eldest sons sometimes perform poorly because they expect to inherit the firm and therefore do not train or educate themselves with the same intensity as those candidates who have to fight for their position in the wider talent pool.’ – McKinsey
Look beyond the C-suite
Top-tier management matters of course, but key employees leaving further down the organisation can cause headaches if you don’t plan for them. 'It may be someone relatively junior but who has core knowledge; the plan has to take account of the transfer of that knowledge.' Each department should formulate its own plan. – Hugh Francis and Alex Garrett
Be ready to move quickly
Chief executives don’t always leave when they’re supposed to. Do you really have a succession plan to cover a leadership crisis brought on by the abrupt exit of your CEO? ‘Some companies have adopted a 'name in an envelope' strategy for a time of crisis, while others have a team approach, with designated individuals forming a management team to handle the interim period until a permanent successor is found. Above all, clear communication is essential to convey a secure and confident succession and to minimise disruption to the business.’ – Denise Kingsmill
Don’t leave people hanging
If your succession plan is a secret chart in your HR chief’s drawer, you might want to think about the message you’re sending to your ambitious underlings. ‘Think about an N+2 model - the next job is just a stepping stone to the one after that. Such leapfrog thinking can get people up the ladder fast - if we want - and we can stop torturing others with short-term hope and long-term delusion.’ – Nigel Nicholson
Know what you want
It’s all very well identifying hard-working, talented visionaries (well, sometimes it is), but it’s important to make sure they’re right for this job. ‘The first major issue a board faces is how to reach a consensus on the attributes required to do the job. This is not easy. The necessary professional skill-set of the candidate must be put into context: first, of the type of business (eg, manufacturing, service-based, monopoly provider, technological); second, of how mature the company is (eg, young, venture capital-backed, listed, FTSE 100); and last, of its success.’ – Alison Carnwarth