A solid succession plan is one of the most critical factors that businesses need to consider when it comes to planning for their future. This will allow them to preserve their current structure and avoid potential problems in the future.
Unfortunately, the leaders of A&P, George and John Hartford, made a mistake by choosing a loyalist to succeed the founders of the company who helped it become one of the most successful organizations in the world.
They chose Ralph Burger, a loyalist, to lead the company. This decision prevented the company from adapting to the changes in the grocery industry.
Succession planning should be conducted to allow you to envision the kind of leader your company will need to thrive in the future.
Determine What is Required for Success
Before you start planning for the future, it’s important that you first think about the company’s current situation. In addition to the changes brought about by the pandemic, other factors, such as the changing social norms and technological advancements, will also affect how the company operates.
You should consider a successor who can help the company reinvent itself. If you plan on doing this, make sure that the board is comfortable with the candidate and has access to all the necessary information.
Make a Preliminary List of Candidates
After leaving your company, you need a successor with a track record of success in building new revenue streams and improving the company’s operations. If you have a strong executive team with a lot of these individuals, you should consider two candidates to succeed you. One of these will be able to create new revenue streams, and the other will be able to control the company’s operations.
If you don’t have a strong candidate inside your company, consider someone already leaving their job at one of your rivals. This individual should fit your culture and will get along well with the board.
Test the Candidates’ Abilities
The next step is to test the candidates’ abilities by giving them big challenges. If they already work for you, ensure they can handle these tasks. If you plan on hiring an outside candidate as a co-CEO, pair them with an experienced internal executive.
To test their abilities, pair them with greater challenges that will require them to excel at getting results. For instance, you can assign one of them to the development of new products that can capture emerging growth opportunities. Another task is to improve the company’s cash flows and exceed performance targets.
Ask Them To Find Their Own Successors
While you are searching for your successors, make sure that they also ask their direct reports to look for their own successors. This will allow them to keep track of the decisions that are being made and ensure that they can quickly adapt to the changes.
Give Your Successors Information
If they are performing well and are building solid bench strength, your successors should also have regular access to the board members and other key information so they can step into your shoes without disrupting the operations of the company.