October marks the beginning of the MLB playoffs. It’s an exciting time in the world of sports, especially if you live in Maryland. I don’t follow the team stats and line-up details like the majority of my peers, but somehow I always find myself involved in these passionate discussions. Typically, they often lead me to entertain my thinking around my clients’ business line-up.
The rate of CEO successions is naturally trending up with the baby-boomer generation reaching retirement age. Consequently, management succession is becoming a significant issue. Executives are putting all their energy into the business. But how much time are they spending on planning the strength of their bench? Organizations need leaders ready to come to bat with a clear plan and vision to ensure uninterrupted delivery of critical services and its mission. Do you have your starting line-up ready?
Fortunately, it’s not too late. Consider these three aspects of succession planning, and help ensure your firm’s longevity:
1. Recruit and retain quality team members. I often relate recruiting to being a GM in Major League Baseball. There are big market teams like the Yankees and Red Sox and small market teams like the A’s and the Twins. No matter what your market, finding excellent people, training them, and then keeping them on board is crucial to creating an enduring organization of success. This is easier said than done. For motivation consider this; it typically costs one-and-one-half to two times the annual salary of a position to replace an employee in that position. So mistakes made when hiring have an impact on company finances. Every company is different in what they look for in their teammates and has different needs from year to year. But if you ask yourself, does this potential teammate “fit” into our system of play or company culture, more often than not, you’ll make the right choice. In addition, investing and maintaining in a program to retain quality team members should be another priority to help yield long-term advantages for your organization and its bottom line.
2. Practice Makes Perfect. Often succession planning efforts focus too much on the process: the presentations, forms, charts, and checklists. These are all important, just like learning the methods behind a good swing, but remember that they are only precursors to what succession planning is really about: development. Put the plans in place and then execute them diligently. Provide each successor with the development opportunities and experiences that he or she needs. Don’t stop at opportunities either. Be sure to provide the right support — external training, a mentor, or a coach — to be sure the successor is acquiring the skills to succeed in the new role.
3. Always have a DH. Succession planning should be more than theoretical. Lay out a step-by-step, disciplined approach to agreeing to and training successors quickly and efficiently should an immediate need arise. While a non-existent transition period is not ideal, sometimes things happen. You want to be prepared and able to proceed without too much disruption to the business.
There are many components to succession planning, so it’s vital that you and/or your business partners start the conversation now. If you have a plan in place already, take some time to revisit it to make sure your success factors are still at play.
McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by advising them regarding their financial, technology and human capital management needs.