This article will explore the finer points of a typical succession plan and then delve into the less talked about points of an IRCG Succession Plan. Both components are necessary. At IRCG, we think both components are critical. Our second component, which describes what to let go of, is the critical piece that is often missing from an effective plan.

Succession planning is a hot topic, to be sure. When you Google the topic more than 1.6 million sites or documents are identified. The topic is hot because there are over 85 million Baby Boomers in America alone. With a workforce of about 163 million in America, the impact of Boomers retiring is critical.
Succession planning is all about finding the right people to do the jobs that need to be done. It is about understanding how to plan for the future in a way that will keep your company strong, competitive, and growing. This article will talk about the challenges facing Boomers getting ready to move on, pass the torch, and plan for the future while ensuring that the companies they have worked so hard to build endure for future generations. At Indian River Consulting Group (IRCG), we take a different approach to succession planning. Current literature talks about planning, communicating, preparing bench strengths, and so on. All of these are important components to a solid succession plan, but we know there is more to it than deciding what to do. It is critical to understand what not to do. Succession planning is more about planning what to let go of and when to let go of it, than anything else.

WHAT TO DO

Effective execution entails two parts. First, you must eliminate as many barriers to success as possible. Possible barriers to success include:

• A placated workforce – we have found in our research that if people in an organization were too comfortable and too willing to blame outside forces for their lack of success, this will be a barrier to executing a successful succession plan.
• Wasteful work patterns – many organizations confuse busy with productive. People have a tendency to stay in familiar routines and don’t question the norm. They don’t ask the questions that raise everyone’s level of anxiety; therefore, they avoid the challenging decisions.
• Wasteful meetings – these are routine and redundant meetings that offer very little time for reflections, don’t challenge “the way we do things around here,” and often lead to unsound decisions for the sake of action.
• Acceptance of poor performance – This often entails avoiding risk by asking employees for less than is possible. This leads to lack of accountability and there is no real commitment. If managers are allowed to hedge their bets, and have unreasonable fall back positions, tasks aren’t completed.
• Lack of disciplined planning – this tendency to be laid-back careless, or cynical about the hard work of planning, measuring and tracking can be a killer to a successful succession plan. Planning is hard work, and bad plans are often weighed down with too many goals or goals that don’t have any big wins. As General Eisenhower said, “it isn’t the plan, it is the planning.” The more disciplined the approach the better the odds of success. Goals need to be clear, measurable and accounted for if the plan is to succeed.
• The pull of the corporate culture – the “way things are done around here” is what we mean by corporate culture. Every organization has one, and there are good and bad traits to every culture. An organization cannot be successful without good traits, and it wouldn’t be human without some bad traits. Bad traits that can derail a succession plan include a confused decision-making process – one that is informal and inconsistent. As you can imagine, if the decision-making process is confusing before you implement a succession plan, it becomes easy for the outgoing CEO to remain too involved in the process, leading to a more confused process. Other examples of cultural barriers are the tendency toward perpetual studies, continually low performance goals, a lot of brave talk, a culture of excuse making, and, over the long run, little action.
  – the “way things are done around here” is what we mean by corporate culture. Every organization has one, and there are good and bad traits to every culture. An organization cannot be successful without good traits, and it wouldn’t be human without some bad traits. Bad traits that can derail a succession plan include a confused decision-making process – one that is informal and inconsistent. As you can imagine, if the decision-making process is confusing before you implement a succession plan, it becomes easy for the outgoing CEO to remain too involved in the process, leading to a more confused process. Other examples of cultural barriers are the tendency toward perpetual studies, continually low performance goals, a lot of brave talk, a culture of excuse making, and, over the long run, little action.
  

You are not going to solve all the organization’s problems or remove all the barriers to performance before you start implementing your succession plan, but it is good to be aware of them and of the warning signs. All of these performance barriers will influence the ability to implement any organizational plan and can be extremely harmful to a succession plan.

Next, you must identify successor candidates through an objective process. If you have a solid plan in place, you have a good start in effecting an objective process. For example, if the candidates have shown in the past that they can effectively execute strategic objectives, they should be able to do so in the future. It is important that someone outside of the organization evaluate the potential successor candidates. This is critical. When people have worked together for a long time, there is often too much familiarity. What you see as extreme competence may simply be an ability to be a strong follower. You must work diligently to identify candidates who can operate without your continual guidance. Part of the process of identifying candidates includes an honest appraisal and assessment of your own skills. Which of your skills are critical to the ongoing success of the organization? What skills and abilities do you bring to the table and how do you develop them in your successor, is a key question.

WHY IT IS IMPORTANT TO LET GO OF CONTROL:

Certainly, all the steps presented above are important. In fact, they are critical. What I have found in working with CEOs on succession planning is that most of this information is known, either intuitively or empirically. Why is so much written about succession planning? Why do so many plans fail? We believe it is because CEOs don’t know what not to do, more than knowing what to do. CEOs won’t, or can’t, let go so the plan can’t succeed. CEOs often fail to realize that when they are gone, the company will continue without them. Therefore, they have to learn to create the reality before the reality hits home. They have to learn to give up control.

As we stated in step one, it is important for the CEO to identify key skills and capabilities. The second part of this process is to identify which of the duties currently being done by the CEO can be moved off their plate. This is an important step and must be done with conviction, which means that the CEO must be willing to accept mistakes, not jump in and catch every ball before it hits the ground, and not always save the day. This kind of micro management may have been important at certain times in the life of the company, but it is a poison pill to a succession plan. Succession plans succeed when the successors actually have the responsibility and the authority to make the necessary decisions that drive the day-to-day operations of the business. Succession plans succeed when the people implementing them have the power to do their jobs. They fail when the outgoing CEO refuses, either consciously or subconsciously, to give up control.

For example, in many situations we see outgoing CEOs nominate themselves for the position of chairperson of the board. It isn’t necessarily a bad thing to name yourself the board chair. Just be honest about your expectations and your colleagues’ expectations that come with the title. If you are going to assume the title of chairperson, define the roles and responsibilities clearly.
In our work we find that the outgoing CEO who is unable to give up complete control assumes the title of chair to stay in the same office and tends to interfere with the duties of the CEO. The company has never before had a chairperson, so the duties are unclear and the move becomes a way to “sort of” step away, without really giving up control. There can be plenty of reasons to assume the title of chair, some of them may even be legitimate. Just remember why you are taking on the title and remember that typically it is a governance position, not an operating position. We recommend that if you name yourself chairperson and some trusted soul (whether a child or a person with longevity in the organization) as the CEO, you vacate your office, and establish a permanent office somewhere away from the physical location of the current business. This move is so critical that it bears repeating. If you want to stay involved in your organization, but are succession planning your way out of the organization, make the break clean. You can’t be a part-time CEO and expect those succeeding you to achieve something significant.

If giving up control isn’t in your DNA, and comes very hard for you, start small. Train yourself to give up responsibility and authority for small decisions, moving up to key decisions over time. Keep a log of which decisions you are willing to drive lower in the organization and keep track of the results. We find that the reason for the unwillingness to give up control isn’t that the people you are entrusting aren’t competent; it is just that you are accustomed to making key decisions. It is also important that you set a timetable with dates that areas of responsibility move from your office to the office of your successor. We have all heard the horror stories of the CEO/Founder still running the company at 80, with the successor to be waiting patiently at 55 for their “big chance.”

You will note as you read this article that a succession plan isn’t very difficult to develop. The difficulty comes with the execution, and the difficulty with the execution usually comes with the person in charge being unwilling to move aside. Once your plan is in place and you have faced the reality that giving up control is difficult, but not impossible, it is time to move to execution. We recommend the following steps:

• Establish a succession team – that includes key managers and key outside advisors, such as attorneys, accountants, and, if you have a board, key board members.
• Hire a professional – this is the biggest career move since you started or acquired the company and/or the position – don’t be afraid to use outside help such as consultants and other resources who are professionals in the area of succession planning. This is not what you do for a living, and executing a succession plan is different than running your business. Look for professionals who have been involved in transitioning a business to another leader. This is one place where real life experience and scar tissue is critical.
• Establish a timeline and stick too it – there will always be the “next crises” that needs your attention; sooner or later you have to accept your new role.
• Remember, it is not about understanding the succession plan, it is about letting go. It is about understanding that you aren’t the only one who can move the process along, and the only way to move it along is to remove yourself from direct control.
• Don’t be concerned if you’re confused – ask questions. If you are lucky, you will only do this once.

There is only one way to make a succession plan work, let the successors have their day in the sun. If you are like most of our clients, you already have a team of loyal, hardworking managers; build a solid succession plan and let them succeed.