How to ensure business continuity when building a succession plan
As an owner founder you’ve worked hard over the years to build a successful business around a set of values that have driven the growth of the business to date. As you look to continue to scale and grow making time to consider succession planning is a critical process that ensures a smooth transition of any changes to leadership whilst preserving your company’s legacy.
To navigate this complex journey effectively, we have highlighted five key areas for consideration:
Organisational Structure: The first step in successful succession planning is determining the optimal organisational structure for the senior leadership team. This choice should align with the business’s strategic goals and future vision. You should consider if you want to maintain a hierarchical structure, or is now the time to shift towards a more decentralised approach, or embrace a hybrid model? Having clarity on this will ensure a seamless transition and the ongoing success of the business.
Leadership Team Capabilities: Assessing the current capabilities of the senior leadership team is crucial. Consider how well your current leadership, or most senior people within your business, align with the company’s value creation plan – now and in the future. Are they equipped to drive the business forward or are noticing gaps that need to be filled? Succession planning provides the opportunity to consider implementing training or mentorship opportunities to help bridge any skills or knowledge deficiencies within the team. But it is also the opportunity to make new hires – a fresh pair of eyes in a leadership team can bring many benefits.
Ideal CEO Successor: As the owner founder if you are looking to take a step back from the day to day running of your business, identifying the right CEO successor is a pivotal decision. The chosen individual must bring a balance of experience and fresh perspectives to the senior leadership team. You should look to consider their track record, leadership style, and compatibility with you and your existing team. Whilst you are not looking for another ‘you’, your ideal successor should seamlessly integrate into the organization’s culture and share the vision for the company’s future.
Optimal Leadership Structure: Succession planning in a fast-paced, high-growth business can involve multiple shifts within the leadership team – or multiple new hires. As the business owner you must assess the overall leadership structure required to achieve your value creation plan, and then accommodate these transitions smoothly. This might involve redefining roles, redistributing responsibilities, or creating new positions to align with the evolving business landscape.
Effective Leadership Change Steps: To ensure continuity and high performance, you should focus on specific steps in the leadership change process. Prioritise open communication, both internally and externally, to instill confidence in stakeholders. Implement a robust onboarding and development program for any new leaders to facilitate a seamless transition. Additionally, establish key performance indicators (KPIs) to measure the success of the new leadership team against your value creation plan.
It is important to remember that succession planning in business is not a one-size-fits-all endeavour. Here at Rowan we work closely with owners of private capital and PE invested businesses to define and design the organisational structure that best suits your needs. Utilising our Leadership Dynamics tool we are able to assess the behaviours and capabilities of the current leadership team, benchmark against peers, design the optimum leadership structure, and implement effective steps in the leadership change process.
Our best-in-class research teams are at the heart of our Executive Search process, and work alongside our consultants to deliver the highest calibre of talent matched to your business ambitions – now and in the future.
If you are thinking about succession planning, or building out your leadership team get in touch with a member of our team today to see how we can help.