The Value of Integrated Emergency and Long-Term Succession Planning

Succession Planning

Adapted from THE STRUCTURE OF SUCCESS by Patrick Esposito

Succession planning is as important to business continuity as breathing is to life. In this article, Patrick Esposito outlines the key to integrated emergency and long-term succession planning as well as the steps to ensure that your business remains stable and successful, whether you are there or not.  

Fewer thoughts are more difficult for leaders to contemplate than how their business or businesses will function without their knowledge, energy, and capabilities. Perhaps that is why a staggering number of business owners and executives tend to ignore succession planning or fail to take it beyond a narrow view of emergencies. Yet, succession planning is key to the long-term survival and success of any company. 

I had the opportunity to work with and advise leaders at various organisations, from two-person partnerships to exchange-listed giants. The best-performing of these companies — the ones that had the happiest teams and the best profitability — were the ones that understood that emergency and long-term succession planning were two equally important components of their operations and were most effective when implemented from integrated playbooks. Both emergency and long-term succession planning merit a little more explanation before we examine how to build truly integrated succession plans. 

Emergency Succession Plans  

When you want to make sure that your business has a long future, the process of creating and advancing long-term succession plans requires far more work than emergency succession plans.

Emergency succession plans are usually fairly simple — especially when compared to long-term succession plans. These emergency plans are meant to be temporary in their application as a bridge to a more permanent solution (which could also be part of your long-term succession plans). These plans are invoked when something abrupt happens — a death, a disability, an immediate resignation, and the like — and some roles and functions need to be filled and well-performed urgently.  

For many organisations, their emergency plans consist of which current team member will be called upon to fill the role of a second team member — for a short period — if that second team member becomes unavailable. Other organisations take a more nuanced approach in which the functions of an unavailable team member are shared by multiple people who are each knowledgeable in certain areas under the purview of the absent team member. 

Long Term Succession Plans 

Long-term succession plans are far more complex. When you want to make sure that your business has a long future, the process of creating and advancing long-term succession plans requires far more work than emergency succession plans.  

The businesses that develop and carry out long-term succession plans with the greatest success know there is a critical difference between conducting simple assessments and preparing for transitions by gradually supporting implementations to make the handoff to the next set of leaders. If you do long-term succession planning in an organised and rational way, your emergency succession plans will become part of your long-term succession plans and vice versa.  

Integrated Plans 

The value of an integrated succession plan is that it allows you to guide both the short-term responses to emergency or unplanned events and the long-term gradual transitions you hope to achieve — absent the drama and trauma. As a result, these plans allow organisations to avoid having future plans derailed by near-term issues.  

There are three elements critical to forging successful integrated and comprehensive succession plans:  

  1. Identify business needs, assess options and gaps, and determine a viable pathway 
  2. Prepare your succession plans and determine the associated required actions 
  3. Move forward with your plans and actions, review plans, and update as needed 

Needs, Options, Gaps, and Pathways  

NEEDS, OPTIONS, GAPS, AND PATHWAYS

When you start the process of integrated succession planning, it is important to remember that succession is not about you — or even just replacing you. It is about what (and who) is needed to fill the key roles and functions in the business that you and other members of your team perform, both temporarily and long term. As much as possible, try to leave emotions and sentimental thoughts out of the planning and thinking process.  

As much as possible, try to leave emotions and sentimental thoughts out of the planning and thinking process.

Trusting yourself and your team is a key part of this approach. And because succession planning is about your team, I recommend that this process be conducted by the management team and that the governance team reviews the management team’s analysis. If you do not have a formal governance team (or even if you do), you likely will want to engage your top outside advisors, too.  

This assessment process may require a mental reset — not just to consider your own mortality and its consequences if you have not done succession planning previously, but also to reassess the roles and functions that should be vested in one individual within a business. Consider what roles and responsibilities — either in emergency circumstances or in the future — should be split among multiple team members. The fact is, it might take a team to replace you or some of your most talented team members.  

That is where the assessment work begins — with a determination of what your business needs in terms of roles and functions, both today and tomorrow, and the associated knowledge and skills to fill those roles and functions.  

After you document the roles and functions, it is time to assess the composition of your existing team compared to the documented needs for roles and functions. This will help determine the emergency and long-term succession options. In performing this assessment, you will also need to assess the interests of the team members in either the temporary or long-range opportunities.  

When you are conducting this analysis, you will no doubt find there are gaps between the existing roles and functions and the current capabilities of your team. For this reason, it is important to consider the potential future capabilities of your team, including what gaps can be filled through growth with training and knowledge transfer. This road map for developing future capabilities can support not just succession planning but also improve your operational outcomes today. Sometimes, not all of the gaps can be filled by training. In those circumstances, it is important to decide how to achieve the temporary succession needs with your team and outside advisors, while you consider how to potentially recruit new talent to the organisation to improve the odds of success for your long-term succession plan. Depending on the financial position of your business, it may or may not be practical to pursue these recruitment activities today. And, if it is not practical, it is quite reasonable to simply turn your focus towards potential future hires. 

Document Plans and Actions  

After you and your team have completed your assessment, it is important to thoroughly document both the emergency and long-term succession plans, as well as the actions that are needed. Such actions might include training, knowledge transfer, mentorship, ownership opportunities, other compensation incentives, or recruitment of new team members for significant functional succession gaps to ensure these plans can be implemented successfully when needed.  

There should be clear communication with the members of your team about their parts (or lack thereof) in both the near-term and long-term succession plans.

In addition to the formal documentation, there should be clear communication with the members of your team about their parts (or lack thereof) in both the near-term and long-term succession plans. For the team members who are important to the integrated succession plan, you may want to consider new or additional ownership opportunities and sustained duration incentive plans to ensure these most valuable team members are willing to stay for the foreseeable future. For the team members who may not be currently projected to play significant parts in the succession plans, you need to be prepared for departures, because their exclusion from or small parts in the plans may not align with their vision for their future at your business. It may be important to consider how to provide additional opportunities or incentives to keep them happy and engaged if they are important members of your team.  

Implement Plans and Actions (and Updates)  

IMPLEMENT PLANS AND ACTIONS (AND UPDATES)

With your integrated succession plan — consisting of emergency and long-term elements — finalised, you can begin the process of the training, knowledge transfer, and mentorship necessary to effectuate it. With your foresight, you should be able to make any transition of responsibilities for the long-term succession incremental. This process, in all likelihood, should be able to support better performance if temporary succession plans are triggered in the interim.  

As you advance these actions to support the plans, you also should continually assess how the training, knowledge transfer, and mentorship activities are proceeding. If things are not going well and it looks like your plans may have been a little optimistic on potential future capability development among the team for certain roles or functions, you may need to update your plans. Most companies reexamine their succession plans no less than annually, and as circumstances warrant, to ensure the needs and potential fits are still valid and aligned, but the companies that are positioned for success always focus their succession planning activities on an integrated model uniting both emergency and long-term needs.  

About the Author

thumbnail_Patrick Esposito Photo LargePatrick Esposito, author of  THE STRUCTURE OF SUCCESS, is the CEO of Initiative Labs and President of ACME General Corp. He also serves as counsel with Spilman Thomas & Battle law firm. Esposito has helped found, lead, and advise businesses in technology, consulting, and other sectors. He was co-founder of Augusta Systems, Inc., which was acquired by Intergraph Corporation, and was co-founder of Resilient Technologies LLC, which was acquired by Polaris Inc. His latest venture, Initiative Labs, helps leaders apply the approaches and tools in his new book. You can learn more at www.patrickesposito.com