In 2008, Plante & Moran completed the transition process from one managing partner to the next for the fifth time since 1950. During that transition, there were no power struggles or controversial hand-picked candidates, and our firm’s day-to-day operations, client service, and long-term planning continued without interruption. Both then managing partner Bill Hermann and current managing partner Gordon Krater were prepared for their roles in the transition…but only because of the process that’s been in place at Plante & Moran for decades.
Over the years, Bill and Gordon have become experts regarding business transition best practices. Recently, the two of them shared their insights via Succession Transition: A Roadmap for Seamless Transitions in Leadership, a book chronicling six areas of focus that help ensure healthy organizations and, as a result, successful leadership transitions. Perhaps more importantly, it offers a great deal of advice, because there’s more to succession planning than formality. As one Plante & Moran axiom goes, “There aren’t many rules, but there are a lot of guidelines.” Here is a brief overview of the guidelines discussed in the book.
Building a Positive Organizational Culture
The first step toward effective leadership transition is a positive organizational culture. All organizations have a culture, whether they realize it or not. The strength of a culture depends upon how much attention it receives as a business grows. For example, a major study found that companies with well-managed versus poorly managed cultures increased their revenues 682 percent versus just 166 percent. Good cultures help reduce staff turnover and help win new clients. Staff generally rank good culture above most other workplace considerations. A strong positive culture helps support natural, orderly leadership transitions by allowing people to focus on their job responsibilities and not concern themselves with the office politics that often accompany leadership changes.
Communication: A Key Pillar in a Positive Culture
Communication rests on transparency. Senior management must inform staff of future plans and communicate in a variety of ways, from e-mails and blogs to voicemails and personal meetings. It’s also critical to recognize and reward good work, and have fun. There’s a saying that if you enjoy what you do, you’ll never work a day in your life. Creating an environment like this results in low turnover, happier clients, and a deep bench of potential future leaders.
Finding future leaders begins with recruiting and hiring. It’s important to select candidates that will fit into your culture, candidates that, above all else, will always do the right thing. When it comes to identifying potential leaders, the growth cycle of your organization will affect which leadership skills are necessary. Knowing that people have different mixtures of qualities and kinds of intelligence helps you determine where they’ll function best in your company. This is part of diversity, something that’s critical to businesses in the 21st century, as surveys show diversity enhances creativity, ingenuity, and profits.
Learning & Development
Even the most talented staff needs training of all kinds, both informal and formal. Good training programs and practices should relate to business goals and tie directly to an individual’s personal goals. Consider creating a staff development model to guide your training programs. It should be a foundational model designed to help staff understand the process of developing their technical, relationship, and client service skills.
The primary benefit of mentoring is giving staff much-needed life experience. It can be formal, when a mentor is assigned to a staff member, or informal, when a staff member requests such a relationship with senior staff. Those who receive mentoring report that it helps them feel valuable to their firms, tests their leadership and management skills, and makes them more promotable.
Successful transition begins with a current leader’s decision to step down. This is not easy to do. Still, it’s important for leaders to put egos aside and recognize the benefit of a fresh perspective. Stepping aside can also build deeper bench strength, because it creates multiple opportunities for advancement and allows new ideas and creativity to surface.
A democratic process should be established for selecting successors. This can be a nominating committee of some sort or a group that helps identify what skills are needed in the next leader.
The Importance of Leadership Transition
Leadership transition can make or break organizations, large or small. Failure to plan for an effective transition imperils the next generation of leaders, your customers, and may make your organization less attractive to potential suitors in the event of an acquisition. On the other hand, thoughtful, deliberate planning can see an organization through generation after generation of leadership. Which camp would you rather be in?
Pick Up Your Copy of the Book Today!
Copies of “Succession Transition: A Roadmap for Seamless Transitions in Leadership” can be purchased at leadershiproadmap.plantemoran.com. E-reader copies are also available. All Plante Moran proceeds from the book will be donated to charity.
In addition, don’t miss the opportunity to hear Bill and Gordon talk about their book. Check out the archived webinar at webinars.plantemoran.com. Bill and Gordon discuss (1) why succession planning is critical to a company’s success, (2) the six major components integral to a successful transition, and (3) how to effectively identify and develop future leaders.