Before you pass the torch, you need to make sure that your next generation of leaders is up to the task.
It would be nice if leadership transition was a refined science with its own set of rules that produced expected results. Figuring out who’s going to take over and what that looks like is more like trial and error: You just need to try it to know if it’s going to work. People who look like good candidates don’t always work out.
Here are typical scenarios I’ve run into with strategies to help you identify problems sooner than later:
- The eye-opener. Being an owner looks like fun until you start walking around in the owner’s shoes, sitting in tedious meetings talking about insurance, budgets or how to let someone go without getting sued; working on weekends; dealing with staff who are necessary but who always present problems; listening to two managers arguing over which software system to use and why, ad nauseam; looking at your line of credit to make payroll again because a project is delayed or a client is stalling on payment. I’ve seen promising stars take stock of the harsh realities of ownership and back away. No thanks, who needs that? This is especially true of a younger generation that values balance in their lives. The sooner you can expose emerging leaders to the unglamorous hard work of ownership, the sooner you can weed out those who will chose a different path. Succession planning is always battling time. It takes a long time for people to really understand how to operate the business. If you wait too long, you could find yourself back at the beginning of the process and delaying your scheduled exit date.
- The fit. Typically, emerging leaders are identified because they’re really good at their jobs, can manage themselves with virtually no oversight, clients love them, and they’ve shown a desire and appetite to put in the extra work. And, they have made it known they want a seat at the table. How well do they manage people? Do they earn the respect of their peers? Who do staff turn to for questions? Effectively managing people just comes from doing it. Some people are just naturally gifted at tuning in to people and staying out of their way. For others, it’s very difficult to not just do it themselves. Delegation can be learned, but are the people wired to be effective managers? Some people, who are good at their jobs, don’t like dealing with people problems all day. It’s not part of their natural skill set, and they fight it. Again, people need to be thrown into management positions and tested sooner than later. It’s not uncommon to find leaders who don’t have the aptitude to be managers nor do they have the interest to learn.
- The un-leader. Leading and managing are different. I’ve coached people who are good managers of people but don’t have the fire in the belly to be leaders. Leading requires passion, an appetite for risk, and an aptitude to think beyond the status quo. It’s very challenging for people to think strategically if they’ve never been in that situation: Identifying core problems, gathering critical data, imagining different scenarios, thinking through the pros and cons, presenting and defending your plan, making adjustments, getting buy-in, following through with the hard implementation. I’ve given people templates and coached them to pick up the challenge. What I’ve found is people can be developed, but some people are not just wired to be leaders. They know their place, and it’s not at the head of the table.
How do you screen and develop future leaders? There’s no substitute for trial by fire. But there are also formal skill and personality assessment tools, of which there is no shortage in the market. What’s critical is to try to understand fit and potential early by assessments that measure what potential candidates naturally gravitate toward. People can be trained, but if an assessment indicates that a candidate is very low on initiative, you’re not going to transform that person into an inspired leader who comes up with new ideas. The same can be said about other key leadership measurements, such as whether they are naturally a positive person or confident in presenting their own ideas. These assessments are useful, even if your candidates are not the future owners. Knowing the potential of your staff will help you understand how far you can develop them and where they fit in the organization. It also helps you identify emerging leaders before they are faced with tasks beyond their nature.
Even assessments that generate beautiful graphs and specific numbers can’t predict that people can continuously surprise us. I’m more inclined to trust someone who believes in their own ability to shore up areas of inadequacies and works to improve themselves. There’s no measuring tape or easy predictor for a strong will. As you look at the future owners of the company, use everything at your disposal: formal assessments, training, coaching, challenging assignments, and encouragement. The more information you collect, the better you’ll be able to gauge if you have the right team for the future.
Leo MacLeod is a leadership coach in Portland, Oregon. He can be reached at leo@leomacleod.com.