Preparing for the Future: Succession Planning

Succession planning is multi-faceted, strategic preparation for the movement and change of personnel within an organization. It is not just the change of ownership from one generation to another but so much more. It cannot be understated how important preparation for these critical and inevitable times can be for the longevity of your company. Considerations should extend far beyond the top leadership transition to best prepare for your future organizational shifts. Whether strategized in advance or managed in reaction to unexpected circumstances, as key position changes occur, succession planning is inevitable. Sometimes circumstances are anticipated, while other times, a change happens unexpectedly, requiring flexibility and resourcefulness to keep the business running with minimal impact. Regardless of the scenario, sound planning can mitigate the impact on both the business and the team members involved. 

Succession planning normally begins as an individual expresses their intent to move out of their current position. These transitions can be a vertical move within the company, such as a superintendent moving into a project manager role, an exit, such as a COO or president’s retirement, or an immediate opening due to termination, disability, death, or job abandonment. Regardless of circumstances, these transitions are often emotional as well as political. Proactive succession planning can prepare you to separate emotion from the situation and focus on the necessary tasks at hand. Whether you are onboarding new leaders and acclimating them to your company culture, managing the transition-based concerns of your downline employees, transferring account access, training mid-career leaders for growth, celebrating the tenure of departing/retiring executives, or any of the countless other potential succession-related tasks, advanced planning will diffuse company-wide anxiety around the situation. 

TRAINING FOR SUCCESS 

 Departing employees take with them invaluable experience and knowledge that can be lost in the shuffle if transitions occur without foresight. For example, imagine that a project manager is promoted to a more senior position, and a new hire fills the vacant PM role. A typical transition might mean that the new project manager’s first day is the same day the previous project manager begins their new role. Since there is no overlap and both positions require a certain amount of training, the previous project manager is unable to effectively train their replacement. The demanding nature of our business leaves little time for the new and old project managers to cross-train. 

With a successful succession plan in place, the new project manager would be onboard several weeks before the original PM makes their transition. This would allow the senior team member to pass along their experience and best practices to the new hire. In this scenario, the new project manager receives several weeks of valuable training and has a more solid path to success. The two weeks of shadowing and training may save you exponentially more time in the future as you avoid mistakes made by an otherwise untrained team member or turnover resulting from inadequate preparation for expected responsibilities and subsequent job dissatisfaction. The timing of these transitions may also be a more successful use of internal resources that will be tied u as new positions are onboarded. 

Ensuring thorough onboarding and training for a new employee can be a daunting task with a plan-in-place, but almost impossible with no plan at all. Fortunately, training schedules can be developed in advance and held at the ready to use in the event of an unexpected transition. Maintaining a plan for each role within your organization creates efficiencies in many ways, such as: 

•  Line-level employees remain unburdened by the transition as they need not answer questions, demonstrate tasks, or explain company policies and procedures. 
• New hires and trainers are both clear on the expectations during the training period. 
• Leaders can provide realistic timelines for clients, vendors, and subcontractors regarding changes occurring within the company. 
• Clear expectations can be set in the hiring process as to what the first 30 days on the job will entail. 
• Onboarding can be tracked and quantified so that the onboarding procedure can be continually improved. 

Your plan may be a simple checklist to onboard any new office employee, or a complex working document complete with key account details and systems access credential creation to handle a top leadership change. With any succession plan, it is crucial to leave a certain amount of flexibility to account for situation-specific needs that simply can’t be anticipated. The transition of an internally promoted employee will differ greatly from an outside hire, requiring an introduction to additional facets of the company, such as vision, values, and culture. 

TURNOVER AT THE TOP 

Top leadership transitions require more thought and planning than replacing a superintendent or project manager. Based on your company structure, a president or CEO looking to make a move away from the company will have additional considerations such as financial guarantees, ownership stake, and, ultimately, the legacy and reputation they are leaving behind. For most of us, our professional lives make up a significant portion of our identity, and we have devoted a vast amount of our adulthood to their pursuit. It is hard to step away from something you have poured your blood, sweat, and tears into for years on end. It is not uncommon to find leaders who step away from their roles and land on unsure footings as they seek a sense of purpose in the next chapter of life. Planning can help ease this transition for all involved. 

EXPECT THE UNEXPECTED 

The one situation that no one wants to deal with is a sudden transition. Say an employee or leader is injured, incapacitated, arrested, or killed. Dealing with the fallout of the sudden departure can result in a reactive response rather than a proactive, planned approach. Having an emergency succession plan in place for all key roles to ensure business continuity is just as essential as insurance and budget planning. Sudden deaths of owners and key leaders have resulted in masonry companies shuddering their doors as they lacked proactive plans. While we don’t like to think about what happens in these situations, we must do so to lessen the burden on those that we will leave behind. 

Think of an emergency succession plan as a means to protect your legacy and assets and secure a source of income for those that you leave behind. There are many ways to help ensure the continued success of the business after a sudden transition, but communication of these plans is important. Ensuring that key personnel know what to do during an uncertain time can mean the difference between success and failure. For example, the president of a company suffers a stroke and is incapacitated for an extended period. Without a plan, the company’s leadership is likely to flounder while attempting to keep the business afloat. With a plan, key employees may know how to keep the business going during the difficult period. 

MY POV 

Informing these thoughts on succession is my own recent experience with the process. Though succession planning is an ongoing project, top leadership transitions occur less frequently and, as I experienced recently, require adaptation and adjustment even with a solid plan in place. Given the high rate of family involvement in our industry, more often than not, succession planning centers around the financial and legal transitions occurring between parent and child (or children). 

In our case, my father, a mason since the 1970s, created and built our family company, Adams Masonry, in Chattanooga, TN, from the ground up. Working alongside my father for the better part of 2 decades, I gained the necessary experience and skills to assume the top leadership role as my father announced his retirement in 2022. Our transition, while still somewhat ongoing, included planning for his next season in life and his diminishing involvement in the company’s daily operations. I am thankful we spent the time planning together and that we enlisted experts to assist us with the process years in advance. 

While the continued involvement of the previous generation or leadership is not the right decision for every succession plan, I have appreciated the ability to access my father’s wealth of experience and count on him as a trusted advisor. Other companies may opt to appoint former leadership to their board of directors, issue honorary titles, create or distribute ownership stakes, or find alternative ways to provide mutually beneficial next steps. 

While all succession plans for top leadership will look different, it is important that the person looking to make an exit from the company take some time to consider what this next chapter of their life looks like, whether it be retirement or moving on to a different opportunity. Having a goal to look forward to can be key to the successful transition to the next chapter.  

Our story is not unique. In our industry, succession planning often revolves around one generation transitioning leadership to the next and frequently involves a transition from parent to child. The family dynamic to succession planning can create friction as management styles change, priorities shift, strategies are reassessed, and so forth, all while maintaining a loving and respectful family relationship outside of the business. 

 Approaching a familial leadership transition such as this requires intentional, collaborative planning. Experts should be contracted to help develop a plan that deals with all aspects of changing leadership and ownership – which should be considered for all their individual nuances. Transferring ownership through either a buyout, gift, or trust is one of the options available. The financial impact to both parties is a consideration that should be strategically considered for years ahead of a transition as new leadership/ownership will have to contend with securing loans and lines of credit and developing their relationship with the bank or banks. A long-term succession plan can take this into account by helping to strengthen the next generation’s financial situation, developing their relationship with financial institutions, and beginning to sign on to loans years ahead of a transition to alleviate concerns that banks may have with new leadership.

We can look to large, successful companies that have managed to transition for multiple generations as a guide to help us look to the future. They have several things in common: they foster new talent and help guide the careers of their future leaders. We can take some of these and incorporate them into our own companies. 

Every situation is unique and requires a different response, but with proper planning and follow-through, a successful transition is achievable. Deciding what plans to put in place is up to you, and I cannot stress enough the importance of working with experts when a transition involves leadership and ownership changes. For every successful transition, there are multiple failures. These failures can lead to resentment in families, loss of assets, and the failure of a company. On the other hand, successful transitions can lead to growth and success for all parties involved with proper planning. For family businesses, the generational transition is inevitable; a succession plan helps ensure that your company continues to thrive and grow for the next generation and, hopefully, many generations to come.  

MY CHALLENGE TO YOU 

Look within your ranks to see who has potential and help develop them for the future so that when the time comes to transition for any reason, you have identified talent to take their next career steps. This applies not just to senior leadership but to all key positions within a company.  

Begin (or review) your succession plan today with the following considerations in mind: 

• HR needs 
• Financial impact of training time (financial impact of abbreviated training. Think long term) 
• What equipment will need to be purchased and issued? 
• What technology and equipment will need to be returned by an exiting employee? 
• How will uniforms, PPE, and other company-branded apparel be ordered and provided? 
• Will business cards be needed? 
• How will you announce the transition both internally and externally? 
• How will account/project details be communicated? 
• When will key contacts be introduced? 
• Who will create/issue system access credentials? 
• How will company culture be introduced?