Andrew J. Goldberg
The Amtrak accident in Philadelphia was a tragedy for many families and businesses. Possibly none more so than ApprenNet, whose newly appointed CEO, Rachel Jacobs, was killed in the accident. The passing of Rachel is also a tragic reminder that all businesses must review their own succession planning.
Many people think succession planning is all about transferring the business from one generation to the next, but it more often applies to the unforeseen departure of a key executive, whether by tragic accident, leaving for a new job, or some other event. While I’m not sure any business can fully “prepare” for the loss of a CEO or key executive, they can have strategies in place, to minimize the impact.
How To Prepare For An Unexpected Loss
First, every company should have a talent development strategy. Talent development is not just a fancy word for HR. It means evaluating and grooming high potential employees so they can move up the company ladder. These employees must also get training and experience in operations, finance, HR, accounting, sales and marketing.
If you do not have the right people in your organization, you should have an on-going relationship with an executive recruiter before you need the recruiter. I have many clients who continuously consult with recruiters so they know who is a “available” and they can hire in an emergency. This is just like many NCAA athletic directors who keep a list of basketball or football coaches they would go after if their current coach quit or was lured away by another college. Also, if you don’t have the right person internally to take over the key positions, make sure your company is well enough known in the industry so that it can attract top talent.
You must also have a comprehensive strategy to “calm the seas” within your organization. When a top executive is lost, key executives and managers will question whether the company can continue on the right course. Having a comprehensive plan in place before something happens will enable you to quickly, efficiently, and competently implement your succession plan and more importantly, instill confidence in your employees that the company is still on the right track.
It’s not enough just to identify individuals as potential successors, you must also know the specific skills and attributes they bring to the position. The talent development area must know exactly what skills are needed in the vacant position. For instance, the skills of a CEO or CFO needed for a startup company, will be much different than the skills needed for a more mature company. The skills you need will depend on where you’ve been and where you are going.
So, the succession plan is not a static document, it is always evolving based on your current employees, their skill sets, where your company is in its business cycle, who you competitors are, and the list of potential candidates to replace a lost key executive.
Who Is Responsible For Your Company’s Succession Plan?
Now, the next step. The discussion above is about the elements of a succession plan. But the most important concept is making sure a specific person(s) or committee is responsible for this area. It cannot merely be an afterthought for the company. Also, those tasked with this job should report to senior executives or the board, and update this information, at least semi-annually so it is current.
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Andrew J. Goldberg earned his J.D. from University of Michigan Law School
