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December 4, 2019

Succeeding at Succession

The HR Industry Benchmark Survey Report 2019 released in November identified that succession planning was a challenge for 16% of respondents – well behind leadership development, culture change and change management.

But for those facing the issue, it can be their greatest challenge. We were with a friend in the throes of a founder finally exiting after completion of a phased buy-out. It’s hard to think about how a large organisation might run without the person who built it from the ground up. I’ve always felt it takes two people to replace a founder, because they accumulate so much knowledge about so many aspects of the business over their tenure.

The obvious thing is to think about who will replace that person. There’s no doubt that’s always a critical consideration. You have to recognize that you can’t replace that amount of institutional knowledge with another individual. So, the organisation often hits a bump as a new person gets established, works out how things work, applies their own knowledge set and how they want the organisation to work.  At the same time the organisation is learning about them and how to work with them – it’s a period of transition and distraction.

It’s useful to think about how you can smooth the bump (you can never eliminate it). In our friend’s case, the particular issue was that the founder had a style which could be politely described as command and control.  Their ethnically diverse workforce deals with this in various ways, but the common theme is disempowered and disengaged. Realistically, a replacement for the founder was either going to be another despot (and who would choose that, even if you could find one?) or someone more benevolent, although that style would still take a long time to get over the bump.

Here’s another thought: strengthen the capability of the operational managers (middle managers, technical managers, team leaders and supervisors) so that they need less direction from the leader above. Upskill them to be more confident in making decisions and teach them how to lead their people better so that the issues the founder liked to get involved in simply didn’t arise.  Start the development process now so that it’s a much smaller bump for the new leader to navigate when the transition happens.

Changing the culture isn’t easy. In this case it will need the agreement of the founder, and they’re accustomed to doing things their way (and the new owners have an interest of their own). They will need to support a process of training and skill development at that operational level, which will get difficult from time to time. We know from our Active Manager Programme that operational managers start to push at the boundaries of performance imposed by their leaders, and we all tend to bristle when other people have better ideas about our job than us – especially direct reports!

This is what a high-performance culture looks like: led from the middle and the floor, guided and enabled from the top.

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