In the last ten years, from 2010 to 2020, the number of people between the ages of 55 and 64 in the US increased by 64%. A national leadership study completed by the Annie E. Casey Foundation in 2019 confirmed that Baby Boomers account for nearly 73% of the key leaders, managers, and supervisors in US companies. These Baby Boomers are going to leave the sector in two waves: the first by 2016 and the second by 2025. A little over half of the Boomers (57%) in leadership positions are planning on leaving by 2012. Nearly 85% plan to leave during the next 7 years.
There are many different definitions for succession planning. For our purposes, we are limiting this topic to leadership transition.
Keys to Success
Many of today’s business failures are due to a lack of thoughtful succession planning. As your company begins to think about the leadership transition process, the following key points will help you stay on track:
- Select a person who has the personality and style to have a positive influence on the morale of the staff.
- Choose a person with a great passion for the work, staff, and clients.
- Make certain that the person has a good working knowledge of the company and industry.
- Seek a person with a high level of loyalty to the organization.
- The organization should be prepared to invest substantial resources in professional development.
- Select a person who understands the vision and culture of the firm and is committed to both.
Leadership transition can work without these guidelines, but you will have a much higher level of success with these criteria included in the process.
Challenges to Succession Planning
As you work through the succession planning process you will encounter some of the following issues:
Finding the most qualified person who also aligns with your vision and who can get along with staff.
Finding the time it takes to develop a successor.
Wanting to move too quickly. Don’t make decisions hastily just to get done.
Having just one person make all the decisions.
Succession Planning Process
The process does not have to be overly complicated. However, it is always best to follow some form or process to ensure that the succession plan is successful. This would be true for family-owned and non-family-owned businesses as well. All too often family-owned businesses merely pass the succession on to the “next” family member, only to discover that the person lacks the skills, interest, or passion to continue the business.