Most of us aspire to be remembered fondly and reverently, having left a positive mark on the world, or the business you have been at the helm of.
‘Great is the art of beginning, but greater is the art of ending.’ (Henry Wadsworth Longfellow)
As useful as it would be, none of us have a crystal ball to tell us exactly how the future is going to pan out, or how soon the end of our careers may come. As a business leader, proactively starting conversations about your succession and legacy early will put your organisation in a much stronger position to deal with what may lie ahead and enable a smooth leadership transition when the time comes…be it in five, 10 or 20 years’ time.
Yet, in our experience at Grey Lemon, founders across many sectors ignore such thoughts until the clock starts ticking and the inevitable is staring them in the face. That is unless something unfortunate happens and they no longer have a say in the matter.
The reality is that if you’re not talking about leadership transition at least three years in advance (at the very minimum), you’re setting yourself up for an exit that is troublesome at best, and disastrous at worst. Any level of ambiguity or doubt when passing the baton can perturb shareholders, disrupt teams and hurt your bottom line.
So, where to begin? Let’s consider a few key points:
When is the right time?
‘I’ve got a few good years in me yet!’ Sound familiar?
Procrastination in relinquishing control is more common in business than you may think. With so much time, energy and money invested, it can be tough to even contemplate it happening, let alone start preparing for it.
Legacy planning and leadership changes can be sensitive and confusing topics to tackle, so it is worth consulting an expert in the field to guide you through your options.
Start as you mean to go on
As in most areas of business, clarity and collaboration is crucial. By including your senior leadership team in the process as early as possible, you can develop a plan that everyone buys into both structurally and culturally.
Succession planning requires a 360° approach. You must examine the impact of your departure from all angles and consider the perspectives of everyone involved. After all, an exit is as much about them as it is about you.
Who will steer the ship?
A change of ownership can drastically shift the way a business operates. Choosing the right successor is therefore critical. Understanding the nuances of the figurehead role and the unique value of what they offer is key. If there isn’t an awareness of how the person exiting is perceived both internally and externally, it can create a huge void which can be difficult to fill.
Time is critical in order to grow and position the right people. Taking a long-term view enables firms to avoid any last-minute power struggles or politics as it gives stakeholders the space to agree on who best fits the bill.
Unfortunately, change can sometimes happen much earlier than expected. With no succession plan in place, uncertainty will undoubtedly follow both internally and externally. Who is leading the business? What will it look like going forward? Will the name above the door change? How will it affect the standard of service/product?
Family ties
Of course, some matters of succession should be more straightforward than others…but that is not always the case. Often the trickiest situations to manage are those involving family where nepotism and rivalry can quickly unravel a successful business.
Encouraging alignment on company purpose and shared ambition is the best place to start should discord arise. If things get tricky, consider bringing in an independent facilitator as a first step to aligning disparate perspectives and reaching agreement on how to move forward. If that doesn’t work, mediation is also a highly effective way to reach a resolution that everyone can get onboard with.
Financial affairs
Financial considerations are a natural priority for any exiting leader and, indeed, all parties within the ownership structure. Whether shares need to be reallocated or opportunities given for people to ‘buy-in’, all exit options must be carefully considered for both the departing founder, and the health of the business.
It is always best to consult with a specialist legal and/or financial advisor to ensure that everyone concerned has defined their individual and collective objectives and understands the choices available. The earlier a mutual decision can be reached the better, to maximise the value of the business while the owner is still in place.
(Re)defining your purpose
A new era of leadership can offer the chance to reassess the business and its place in the market. For any shift in direction to succeed, it is vital that the company’s purpose or vision for the future is clearly defined and agreed by the new leaders, an external fresh perspective can support this process to its best conclusion.
A revised purpose should build on the organisation’s history and legacy while establishing a new roadmap that the entire workforce can engage with and support.
Agreeing specific, measurable and timely objectives along with role clarity will enable senior employees to feel confident and empowered to drive the organisation forward.
Managing perceptions
Let’s not forget about your employees.
Clear internal communications will help mitigate any concerns or uncertainty among your team, especially if the person leaving is the original founder. Ensure your employees are afforded the time to engage with and buy into the future vision and build trust in the new leadership. Your employees must feel part of the journey.
Well-timed and appropriate external messaging is also critical. A risk assessment completed well in advance can help gauge the impact on the business from an outside perspective. This includes how clients, customers, stakeholders, shareholders and the wider market will react, identifying any potential damage to the perception of the business and its future success.
What’s next for you?
As the business owner, it’s crucial that you’re prepared for the next phase of life. Without an obvious path in mind, it can be all the harder to step away from your ‘baby’. You may wish to still be involved in some capacity or perhaps you’re leaving to set up on your own or in a different field altogether. Whether business life continues or you’re retiring to enjoy the fruits of your labour, therein lies another message that needs to be carefully aligned to communicate next steps in a positive light for all parties, both internally and externally.
To sum up
The key to success? Allow yourself the time to craft a worthy ending so you can walk away feeling proud of all you’ve achieved, and excited for all that’s yet to come.
Read more:
Succession & legacy planning: Can it ever be too soon?