Stephen H Baum Leadership

SUCCESS WITH SUCCESSION

One “founder” client opted for real succession planning three years ago, had a mis-step with his first hire of a CEO to replace himself, but kept at it until he found a leader he says is far better than he at the next phase of the life of the company. The successful succession contributed to his ability to sell control to a P/E firm for a very large price and to stay on as Chairman, overseeing acquisitions.

SUCCESS WITHOUT SUCCESSION

Another founder client has no plans to step up or aside and does not plan to do so for three to five years. Yet he is providing new “scope of decisions” opportunities (latitude on key decisions) and financial incentives for several loyalists with long tenure. Without abdicating his authority on some decisions, he is trying to delegate it on others (even if there will be mistakes).

He is also seeking one or two additions to his senior team who are stronger succession candidates that any member already on board unless they step up. He recognizes the competitive need to top-grade his team. And to unblock the career paths of the younger stars.

Approaching a scale where specialists are worth having, he is backing away from filling a variety of positions himself and recruiting “best athletes” in Risk Management, IR (internal promote), HR and other functions. He used to make all the decisions. Now they propose and he disposes, though with experience and trust they are accorded more latitude.

Finally, he is beginning to see that an IPO might be more likely with a top athlete team.

NEITHER SUCCESSION NOR SUCCESS

A third founder client has jawboned his senior people into taking more responsibility but not yet offered a path to greater authority on key decisions and no additional financial reward. He has added some talented new people and is struggling with their lack of fit with the long-nurtured culture.

He may succeed, but he runs the risk of a turbulent period of defections.

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What is your plan? How will you be sure you have the best talent for competing in what is no easy environment?

Just my view. What’s yours?