Paul Raggio | Succession Plan – Do You Have One?

Paul Raggio

Ben Franklin, known for his proverbs appearing in “Poor Richard’s Almanac,” authored a time-immortal quote recognized worldwide, “Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.” This quote appeared in a letter written by Franklin in November 1789 to French scientist Jean-Baptiste Le Roy, concerned that he hadn’t heard from Le Roy since the start of the French Revolution. Franklin provided Le Roy with post-constitutional convention updates on the progress occurring in our new nation, the United States of America. Franklin, in his brilliance, noted the durability of the Constitution yet provided the all-to-familiar caveat that the only thing certain is death and taxes! 

There is certainty in business, too. Every company has an ending, and it pays taxes. The finish may be prolonged because of evolutionary, revolutionary and transformational changes during its life cycle. However, what starts will end sometime in the future, that’s certain. The question we often ask clients is, how do you prepare for this certainty? And we follow up with a straightforward question, do you have a succession plan that includes how you transition the company’s leadership to another during its various stages of growth? 

Succession planning is critical to a company’s sustainability, and sustainability is one of the five attributes of a successful company, one that is sustainable, predictable, stable, consistent and has an emotional connection. All too often, though, we encounter companies from mom and pop to billion-dollar enterprises that are absent succession plans. The company invariably suffers when there is an unconsidered and unplanned change in leadership. 

Succession planning is a thoughtful, deliberate and detailed approach to how authority transfers from one to another. Authority means who makes the decisions that impact the company and its representations. The military transfers a unit commander’s authority on a specific date and time and often celebrates it in a change of command or authority ceremony. The ceremony formally informs the unit and various stakeholders that authority indeed passes from one leader to another, providing decision-making certainty. Certainty eliminates chaos, and chaos is the poison that inhibits organizational growth and promotes decline. 

Companies may use a similar approach. However, the transfer of authority may be incremental instead of at once. For example, suppose a chief operating officer is being groomed for the future chief executive officer position, and a transfer of authority date is specified. The CEO may transfer decision-making authority to the COO over time and before the full authority transfer date. We’ll title the approach left-seat right-seat driver and observer in this case.  

It’s analogous to teaching someone to drive a car. The one learning how to drive sits in the passenger’s front seat, watches and asks questions, listens, observes and learns how the driver operates the car. After a time, the learner moves to the driver’s seat, and the driver proceeds to the passenger’s seat. The roles reverse, and the former driver is now observing, instructing and correcting the learner before the learner obtains their driver’s license. Earning the driver’s license is a change of authority representation where the new driver is now accountable for their driving decisions. 

Subordinate to a succession plan is a nested communication plan that announces to the company and its stakeholders the intended change of authority and how the change will occur. The succession announcement can either reassure or confuse those impacted by the change in authority. Transparency and specificity reassure a potential anxious constituency, and the lack thereof will most certainly sow confusion and create chaos. A communication plan tenet is over-communicating during a transition, just as you would during a crisis. 

Our Constitution and its amendments draw clarity to leadership changes in our government. I continue to be astounded by Benjamin Franklin and our Founding Fathers and their insight in creating such an enduring document. Of course, the Constitution is not without flaws, nor are any corporate governance documents. However, it clarifies the peaceful transfer of power from one leader and their administration to another at all government stratifications; so should your company governance papers.  

Provide the stability your company requires for sustainable growth. Remove the uncertainty with unconsidered and unplanned leadership changes by creating a succession plan. This is how you lead, think, plan and act. Now, let’s get after it!   

Retired Col. Paul A. Raggio is co-owner, with his sister Lisa, of One True North INC Leadership and Business Coaching Solutions. Paul and Lisa mentor and coach business owners on leadership and management principles in achieving and sustaining their business growth and profitability goals. He can be reached at [email protected].     

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