Like estate planning, succession planning is best done ahead of time.
The point when dad can no longer take care of himself alone in a three-story house is not the time to start looking at assisted care options. That should be done years in advance. Likewise, a strong business leader will start the process of selecting a successor long before he or she decides to retire.
Instead of assuming the next boss will be your current second-in-command, start with a blank sheet of paper and develop a profile with the skills and experience you feel are important for the top job.
Don’t stop with a boilerplate job description, but rather look into the competencies and experiences that are needed for the next leader of the company. This type of preparation is easy to use in a scorecard when evaluating candidates objectively.
This profile should be malleable and revised when needed to account for changes in business strategy, market conditions, and other important developments.
When you have your profile mapped out, assess your internal candidates. One way to do this is by conducting a “stress test.” Measure your internal candidates against a short-term emergency and a more scheduled succession that’s longer. One manager always asked her managers, “If I get hit by a bus on the way home tonight, who will take the lead tomorrow?” Although a bit morbid, it brings home the point of the need for continuity at the top.
Next is assessing which internal candidates in whom to invest now so that he or she will be prepared in the future. Can you coach and mentor a possible new CEO?
Use a vacation as a trial run to have a potential successor step up and take on responsibilities. The candidate gets some great experience, and you learn whether they are prepared to lead.
Start by letting potential successors know your vision and include potential leaders in strategy discussions to gauge their planning and leadership skills, to help them develop, and to communicate a broad vision of the company and its objectives. Be ready to offer regular feedback and training to top performers and potential candidates to help them develop new skills and refine those they already have in place.
One of the most crucial—and most neglected—steps in succession planning is preparing for the aftermath of naming the successor. Letting him or her “hit the ground running” may sound like an aggressive and spirited concept, but it’s extremely risky for everyone involved…you, the management team, the employees, as well as your customers.
The named successor will have a great deal to learn to get up to speed, as there are things that may seem to you as second nature that in fact, took you some time to master. Your successor will make some missteps, but let him or her do this while you’re involved in the coaching. Use the time in the succession-planning process between the announcement and the acceptance of the top position for leadership to address as many needs as possible. This includes support, mentoring, executive coaching, and feedback, all of which will foster an effective environment to ensure the success of the new leader.
Remember, it can take time to find and prepare a candidate for leadership. So start earlier rather than later. And make sure to keep an open mind. There may be a diamond in the rough or perhaps three floors down that shows real promise. You’re looking for those employees who best display the skills required to be successful in the top position—regardless of their current title.
Developing a succession plan and identifying potential future leaders allows you to create a sense of value for your employees for their contributions and an opportunity for them to realize their potential within the company.
Succession planning for your medical practice should start today. Contact NM Law, APC (949-253-0000) to speak to a succession planning attorney about your practice and your plans for the future.
Disclaimer: This article is intended to provide a general summary of laws in the State of California and should not be construed as a legal opinion nor a complete legal analysis of the subject matter. Noelle Minto is an attorney at NM Law, APC in Tustin, California, a law firm specializing in Trusts & Estates and Business Transactions.