It's the hottest topic in our industry, today. It's also the most convoluted, least understood and seldom implemented solution to sustaining your business. It's the succession plan and by the time you've read this, everyone will be telling you what to do with yours.
The points of view can be dizzying. A Google search limited only to the topic's scholarly sources yields a staggering 450,000 documents. It seems everyone has an opinion and is clamoring for the opportunity to help you design and build that magic template to ensure your success.
While it is critical to have a well-designed succession plan in place, it's akin to having a well-designed blueprint for a house: It's very difficult to live in until it's finished. The key to your succession plan is picking a spot and focusing your energy on the effective execution of your approach.
Internal succession planning refers to implementing the strategy, structure, processes and talent required to ensure the highest likelihood for the long-term sustainability of your business. Successfully executing your plan will require each member of your team, including you, to say, do, observe and contribute in different ways. Everyone has a role to play in accomplishing the requirements of your plan. Ensuring the capability and capacity of your team to carry out the plan is the first step toward answering a few important questions.
Have I identified the roles and expectations required to execute my succession plan in alignment with the long-term strategy of my firm? If one of your internal succession objectives is to build bench strength within your business development function, you will likely need talent that can actually develop business. A quick, function by function, role-by-role assessment of requirements should give you the picture you need of who you've got and who you need. Identify the critical few, highest-impact contributions for each role. Utilize your team to help come up with the best ways to address the gaps and determine how new responsibilities will be distributed among the existing population.
Should I develop talent internally or look externally to obtain the missing pieces? Either option will leave you with a trade-off. Developing talent internally provides us with continuity, commitment and cultural stability but may require a tremendous amount of intentional effort and time. The external acquisition of talent can be time-effective, but results in inconsistency, uncertainty and cultural disruption. The cost of turnover is high and the speed-dating of the interview process can be cold comfort during the initial nine months of a new employee relationship. Prioritize your missing roles and skills, and then begin internal development immediately. Provide team members with the opportunity to learn new tasks and challenge them to go beyond the status quo. Partnering, job sharing and shadowing are all ways to quickly train and assess those who are willing to rise up and meet the new requirements. If you must look externally, be sure to engage in a high-impact behavioral interviewing process. This will help to minimize redundancies and maximize your ability to hire and retain candidates.
Does implementing and executing a succession plan mean that I'm preparing for my exit? Not necessarily. It's a question of long-term sustainability. A succession plan is one of the tools you have at your disposal to help increase the likelihood of success when transitioning from one stage of organizational development to the next. It may, in fact, be your exit, but it may also be a whole host of other events. Talent development, merger, acquisition, sale of the firm, retirement, new market penetration, changes to client segments or service levels, and the generational transition of assets are just a few of the events that may dictate the need for a succession plan. Take a look at your plan and ensure that it is built to accommodate the events most likely to occur in your firm.
How am I supposed to do all of this and still perform the day- to-day job of running my firm? The answer is that you've got to make it a required part of those day-to-day expectations. It's unrealistic for you to put the entire plan on the shoulders of only one or two individuals. Leverage your team, talk with colleagues, find an approach, pick a spot and begin executing your plan immediately. Getting the ball rolling and accomplishing only one or two of these elements will go a long way toward minimizing confusion and maximizing your sustainability.
Scott Feraro is founder and managing director of Pepin Consulting, a talent services provider focused exclusively on the financial management industry. Scott is a frequent contributor to publications and events relating to talent and compensation related issues facing the wealth manageme
