Often referred to as “The Final Test of Greatness,” a successful leadership transition requires vision, open communication, clearly defined expectations, discipline, and patience. The process should be viewed as a marathon, not a sprint… and as such it requires planning and a long-term perspective.
A good starting point for any succession includes the following “Leadership Transition Checklist.”
- Values: Have you clearly defined your organization’s values? Are these values felt throughout the organization – and do they help define how your company does business?
- Vision: Is there a clearly defined vision for the future? Has the vision been communicated to the employees and is it easy to understand?
- Strategic Plan: Is there a plan for achieving this Vision? Is there buy-in throughout the organization?
- Resource Assessment: What are the resources embodied in the current generation of leaders? (Skills, knowledge base, relationships, etc) Have the resources required for effective company-wide leadership been identified and is there a process for transferring them to the next generation of leaders?
- Potential Successors: Have you identified High Potential employees as your possible successor(s)? Are these High Potential employees aware that you consider them possible candidates for high-level leadership?
- Development Plans: Have you identified the strengths and weaknesses of your potential successors? Is there a plan in place to address their weakness and to continue building on their strengths?
- Career Path: Is there a clear career path in place that will ensure the on-going leadership development of your potential successor(s)? Does this path provide successors the opportunity to build the skills, knowledge, resources, etc. required for long-term leadership?
- Decision-Making Process: Is there a Board of Directors (or other similar body) that can serve to evaluate the potential successors and help make the final decision about a successor? Is the Board empowered to create real accountability for managing the leadership transition process?
- Governance Structures: Have the owners defined the structures required to ensure a successful partnership? ( Buy-Sell agreement, conflict of interest policy, fiduciary responsibilities, employment policy, family member involvement policy, etc.)
- CEO Transition: Is the CEO ready to transition to a new place? Is there a clearly defined set of roles and responsibilities into which the CEO can transition? ( Founding Partners should view themselves as transitioning up, not out.)
- Financial Security: Have the economic needs of the founding partners been openly discussed? Is there a plan for addressing these needs?
- Estate Plans: Have the partners planned for the efficient transfer of their assets to their chosen beneficiaries? Are these plans consistent with the vision for the future of the business?
- Team: Is there a team in place that will support the transition? Is there a process to ensure the on-going development of this new management team?
- Timing and Communication: Is there a defined time-line for the leadership transition? Has this time-line, and its supporting implementation plan, been clearly explained to the rest of the organization?