Q005
What are the
first steps to take?
our take .
There are two sets of steps to consider, and it largely depends on the specifics of your organization. Most of the research referenced throughout this series relies on public company data, as that’s what researchers can most easily gather and study. By nature, a public company will have a board, and succession planning is a core duty of each director, along with performance evaluation of the CEO. So, succession is governed by the board by default and most publicly available guidance assumes that you have a board.
Private businesses, especially those with a single or one-family owner, do not operate with the same requirements. If you have established a board, you can make it part of the board’s responsibilities. But you can also elect a different group of people to support succession planning, or do it all yourself. We would advise against the latter. But making the choice on who is going to work on succession planning with and for you is a necessary first step.
Alongside that decision, you can begin by scoping the most critical roles, which usually begins with the role of CEO. As CEO, start with what you do (see our CEO questionnaire). Whether as part of that document or as a discreet exercise, we’ve found it worthwhile to have executives document a week-in-the-life. What meetings do you spend time in? What do you think about? Who calls you, and why? Where do you insert yourself, or actively intervene with feedback?
A related exercise we often revisit with leaders is the overlap between what you are best at, what you most enjoy, and what the business benefits from the most. Characterized within the role of CEO, it can help to establish what kind of leader you’ve been, which can be a useful discussion starter for your task force/board in scenario building around what the business will benefit most from in the future. Discussions around optionality for the future naturally uncover next steps in the planning process.
As an example, perhaps you founded the business and were product-minded, inventing solutions and refining them over time. While you were good at the entrepreneurial skills required to stand up the business around your solutions, ultimately, product leadership is what you have been best at. As your organization faces the question of who should lead next, might it need a different type of leadership? Perhaps someone who is enterprise sales-centric? It doesn’t mean your talents are irrelevant; in fact, it may mean what once lived only with you will, practically speaking, need to be embodied in a team of individuals going forward.
Identifying the team, and then role reflections, questions, and scenario building are the best first steps. The “emergency succession drills” suggested by Claudio Fernández-Aráoz in “It's Not the How or the What but the Who,” may sound slightly extreme, but scenario building will force consideration of second- and third-order effects, too.
on paper.
character to consider: Brian Dunn
What you say vs. what you do
By 2012, Best Buy was navigating tough competition and internal struggles. The company's long-time CEO, Brian Dunn, was expected to steer the company into the digital age to better compete with online retailers like Amazon. Following a significant dip in sales and market share, though, there were discussions about finding a new direction for leadership. Best Buy’s board started succession planning, hoping to carefully transition leadership and revive the company's fortunes. The plan was to have Dunn continue for some time until they found the right leader to drive transformation. But. Dunn suddenly resigned in April 2012 amid an internal investigation into his…personal conduct. His abrupt departure caught the company off-guard, as no solid succession plan was in place. The board, which had been quietly seeking to talk about maybe changing leadership, now found itself scrambling to manage the transition while dealing with reputational damage.
Flat-footed, wrong-footed, on the back foot
The company’s stock plummeted, investors lost confidence, and rumors circulated about potential buyouts. There was no immediate successor, and the board brought in an interim CEO. Morale within the company dipped as the sudden leadership change led to uncertainty about the company’s future. Meanwhile, Amazon Amazon-ed, and Best Buy’s struggles worsened. In the aftermath, the board hired Hubert Joly as the permanent CEO and launched a major turnaround strategy – but only after the company endured months of turbulence that could have been avoided with a more structured approach.
Any step forward is a step forward
Treat succession planning not just as an eventual need, but as an ongoing process – especially when navigating challenging market conditions. As it began to investigate Dunn’s behavior and consider finding a replacement, there was no real sense of urgency in the process (at least none that outside observers could see). Take the first steps, any steps, early, start small and build, but whatever you do, don’t leave succession planning to someday.
Works consulted
Best Buy's CEO Succession Circus Continues
Why Best Buy CEO's 'expressed affection' for employee was problem
More Succession Topics→
←Q004 How Do You know When a Plan Needs Updated?
Q006 When Do You (Or Do You) Tell Your People?→
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