The following article originally appeared in the May newsletter to clients of Kiley Advisors, LLC. Reprinted with permission.
Succession planning is a phrase that appears regularly in management literature and as a seminar topic. It is also the hallmark of companies that want to become true organizations, with foundations solid and deep enough to sustain themselves for generations. Succession involves many components. Some are financial (sale of shares); several are legal (contracts, minutes new corporate resolutions), and other actions affect the governance structure (new board members). These initial areas primarily affect top levels of succession. But every level of succession planning involves the careful selection and preparation of the successor(s) so that the business and the culture can continue and thrive, and employees can remain comfortable and committed.
Many Houston companies are in the midst of this issue right now – most on an accelerated pace. They realize that some of their key people will reach “the finish line” in the next few years. Further they are seeing clearly that there is a gap in the mid-level management that would be the logical successors. The harsh realities of the market did not permit the old pyramid organizational structure that normally ensures well-prepared successors; companies had to run flat to survive. Consequently they now have a barbell situation: at one end a group of experienced, proven-performing senior executives with limited work horizons, at the other end a group of promising young people, some of whom are true high potentials.
This fact has provided a sobering wake up call, and energized some very serious attempts to get leaders in place for the inevitable transitions in short time frames. Time has become of the essence. We are privileged to be involved in some and are observing others. Companies are employing a variety of methods to prepare candidates for greater responsibilities. They are using a combination of experiences, education and exposures. I will be discussing each of these approaches in future articles.
However it all starts with two essential foundation blocks: a talent inventory and the assignment of a coach and mentor.
Look for Kiley’s further discussion on these two foundation blocks in next month’s article.
