Succession Series | Coaching

Three Warning Signs in Succession Planning: A Path to Successful Transitions

By Timea Kristof, Hult EF Coach

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Succession planning is a critical process in ensuring the smooth transfer of leadership from one individual to another. In my research, I discovered that successful succession relies on the ability of both the founder and the successor to create a mutual and free exchange of energy, aka ‘love’. While my focus was primarily on the founder's willingness to let go, it became evident that the successor's motivation and willingness also played a significant role in the process. In this article, I will discuss three red flags to watch out for in succession planning: the use of phrases like "should do," "have to," and "need to" being key warning signs.

During my interviews with founders, I asked them to describe their larger purpose in life when they embarked on their initiatives. It was fascinating to observe that all of them mentioned a higher purpose, whether it was serving others or making a societal impact, all going beyond their personal needs.

The aspirations and commitment of successors also proved to be essential in successful transitions. In all the successful handovers I studied, the successor showed a strong desire and dedication to take over the initiative, enabling the founder the move on. Regina, who took over her father's logistics company, explained the simplicity of their transition: "I wanted to do this, and he wanted to do something else." The aspirations and commitment of the successor helped both parties achieve their goals and made the founder comfortable with passing on the business.

Conversely, unsuccessful transitions were marked by misaligned career aspirations and different types of commitment. In some cases, successors felt a sense of obligation or fear of missing out, leading to a mindset of "should do" or "have to" rather than genuine motivation. These motivations influenced their long-term commitment to the business and, consequently, the founder's willingness to let go. One of my research founders, Anna, captured this sentiment perfectly, stating that when successors take on a business merely out of a sense of duty, it becomes a burden, killing the inspiration and joy within the company.

In addition to career alignment and commitment, two other factors played a significant role in successful succession: readiness and preparation. Successor readiness involves the right timing and a willingness to take full responsibility for the project. This readiness grows through mutual influence and voluntary exchange between the founder and the successor. Furthermore, the preparation process, whether through deliberate discussions or osmosis over time, helps successors understand what taking over the project entails. This preparation fosters clarity and resolves any disagreements or misalignments.

Founder and successor willingness and motivation are deeply intertwined.

Career alignment, the type of commitment displayed, successor readiness, and adequate preparation are all critical factors that influence the success of the ‘handover’. Unfortunately, these factors are often overlooked when selecting a successor, leading to the failure of many transitions.

Talent professionals should pay attention to the language and attitudes expressed by both founders and potential successors during the succession planning process.

Human resources professionals play a vital role in ensuring the success of succession planning within organizations. By closely observing and monitoring the dynamics between founders and potential successors, HR can effectively identify the warning signs discussed earlier: the use of phrases like "should do," "have to," and "need to." These red flags indicate a misalignment of motivations and a potential risk to the smooth transition of leadership.

L&D professionals should pay attention to the language and attitudes expressed by both founders and potential successors during the succession planning process. When they come across indications of obligation, compulsion, or a lack of genuine motivation, it is crucial to intervene. By initiating open and honest conversations with the individuals involved, they can address any misalignments and explore ways to realign each party’s career aspirations and commitment.

Intervening at the right time is also key. By facilitating discussions and providing guidance, HR can help both parties understand each other's expectations, motivations, and long-term goals. They can also offer resources and development opportunities to nurture the successor's readiness and prepare them for the responsibilities ahead.

In conclusion, recognizing the warning signs of "should do," "have to," and "need to" in succession planning can help organizations navigate the path to successful transitions. By prioritizing career alignment, commitment, readiness, and preparation, businesses can ensure a smooth and effective handover of leadership. It is crucial to consider these factors when selecting a successor to secure the long-term success and continuity of the organization. And in terms of HR, their involvement and guidance are crucial in ensuring the long-term success and continuity of the organization through effective succession planning.

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