By Miles Nadal
Power move: managing successful succession of executives
There is a reason why millions of viewers tuned in to watch the entire Roy family scheme, plot, and backstab their way to replacing the company’s patriarchal founder in HBO’s hit series, Succession. Not that Roy’s savagery is anything new: Shakespeare’s classic plays, King Lear, Macbeth, Coriolanus, and even Hamlet, all focus on the brutal realities of succession.
Transferring authority and leadership from one business leader to the next is a notoriously explosive process that could disrupt or destroy an organization. That’s why a systematic, well-planned, and organized approach to succession is critical.
Passing the torch will always be a slightly uncomfortable topic because it is an open acknowledgment of mortality—as a human and a leader. In public companies, one of the primary mandates of corporate directors is to engineer smooth shifts in leadership on behalf of all stakeholders. In private, however, the elements required to implement a succession strategy and its enforcement are not as clear-cut.
As a life-long serial entrepreneur, I can confirm that most founders are highly emotional and proprietary about their businesses. The company is like their child, they have often spent more time with their team than their family, and these very personal connections make it wrenching to consider detaching—at least initially.
Among the most definitive characteristics shared by founders and entrepreneurs are singular vision, intense passion, and a relentless drive to push their companies forward. These traits are often accompanied by larger-than-life personalities with a strong inclination to control, micromanage, and aggressively discount the input or advice of others.
Most founders are skeptical about whether anyone can fill their shoes.
It can also be more challenging when the founder is the namesake and face of a company. Not only is it a challenging emotional feat for founders, but when a founder is the brand, the market, and other stakeholders can struggle to accept the next generation or differentiate the future of the business from the future of the individual.
To their core, founders, entrepreneurs, and CEOs are accustomed to defiantly proving skeptics wrong, not suffering fools, and plowing ahead with their priorities and agendas. Over decades, that determined mindset has become ingrained—even though listening and adapting are functions of the self-awareness required to bring about the inevitable transition of power into other hands.
Embrace the Process
It starts with an acceptance that a transition is inevitable.
And it’s not always a linear process – it takes time. No successors come into a leadership role fully baked, and there is no shortcut to getting them ready. Instead, succession requires patience, time, mindfulness, sponsorship, and consistency. Whether the search is internal, external, or both, it takes time to find a successor, train them, and imbue the values and insights that are part of the organization’s DNA.
While some organizations may try to institute CEO transition timelines in less than one year, that will almost always result in a difficult transition of power. You also need to give them time to build credibility across the organization as a leader—and successor. Regardless of its size, that process matters. You can’t just tag someone into the role. It probably takes at least three to five years to work through it.
Over those three to five years, focus on the cornerstones of a successful selection process:
- Identify talent with a differentiated skillset from that of the founder. Remember, their role will be maintaining the empire, not creating it.
- Make succession part of the vocabulary. Regular discussions of succession planning, the expectations, and the timeline help ensure that successors and their circles of influence are on board and invested in the process.
- Curate a portfolio of talent that includes a variety of skills and approaches.
Tim Cook, who was handpicked for the role of Apple’s CEO by Steve Jobs, explained it this way: “I see my role as CEO [is] to prepare as many people as I can to be CEO.”
During a transition, you must consistently build and demonstrate confidence in the successor. As a founder, you must get your head around delegating—really delegating.
You must consciously move away from setting priorities and agendas and empower the people around you to step forward and speak up.
Releasing control is a massive challenge after a lifetime of directing everything—and second-guessing everyone. It takes great discipline from the founder not to get drawn in and to truly let the successor take charge. What does that mean practically?
- Start slow: look at your calendar and start declining meetings. Cut back on the number of calls.
- Pose hypothetical questions: instead of sharing your point of view, ask your team what they think.
- Let them be: Resist the temptation to intervene and firmly turn back those who revert to you rather than the successors.
- Let them fail: allow those around you to try and solve problems in their way. The learning process is much more valuable than being right.
- Push them on culture: in times of transition, maintaining (or creating) a strong culture is arguably more important than the nuts and bolts of running a company.
Cultural fit, chemistry, and personality are more important than pure skills and competency.
To implement successful succession, the founder must practically and emotionally engage the successor, but the founder and successor must engage and champion the team’s adoption. That means sharing a clear vision for evolution, clear roles and responsibilities, clear channels for communication, and, most importantly, give confidence in why this succession will enable the organization to go on to incremental levels of success beyond the founder. Otherwise, people will keep running back to the founder for advice and permission.
Successful succession is an organized orchestration of team building, mentorship, and leadership. Just ask Logan Roy.
Miles S. Nadal is the founder of Peerage Capital Group. Over his 40-year career as a respected entrepreneur, philanthropist, and thought-leader, he has refined his partnership principles for business building. Miles and his family support several local, national, and international organizations. He is also a founder of the Milken Centre for Advancing the American Dream and has been a contributor to many news organizations including CNBC, MSNBC, Fox News, and Bloomberg News.