In this second part of our series on “Succession Planning: Passing and Receiving the Baton,” we will go in-depth in our discussion of the phrase “passing the baton” which means “to hand over a specific duty or responsibility.” We will look closely at the significance of this statement in the context of the transition of leaders, which is a harbinger of the ending of one leadership regime and the arising of another new regime to take its place.
In recent years the business world and many other industries as well are currently experiencing a mass transition of leaders because of executives and leaders entering the age of retirement, in what is now being called “The Great Retirement.” Many organizations have been caught off guard as the pace of retiring executives has skyrocketed, resulting in a leadership vacuum. The outcome of this exodus has resulted in tremendous financial risk and a detrimental influence on many organizations’ overall performance.
As the saying goes, “hindsight is 20/20,” as many organizations are now realizing that they could have avoided such a dilemma if they had explicitly pressed into or made a focus on the mortality of key executives and leaders earlier on despite the discomfort or awkwardness of broaching the subject. How placing a focus on the planning for the mortality and thereby limitations of aging leaders and executives could have led to the building of systems, strategies, and procedures to produce new leadership which should be part of any organization’s business process.
Regarding succession planning studies show that the minimal focus of investment in leadership development as early as possible in organizations so they do suffer when high-level executives and leaders depart, has traditionally been overlooked or not a major focus because the idea sounds simple. However, succession transition is actually a very complicated, emotional, and delicate journey not only for the incumbent but also for the new leader, the organization’s Board of Directors, and the workforce. Which is why it is imperative to begin succession planning at the earliest possible moment so that an incumbent can identify and nurture a successor early on and the successor is ready to embrace the role when the time comes, ensuring a seamless and effective transition in leadership.
A helpful analogy in leadership transition and succession is that of a relay race, in which every member should be focused and committed to winning the race. This article will concentrate on the roles of the incumbent and the successor, assuming that the incumbent is the baton’s carrier, and the successor is the baton’s receiver.
Watch our video below or read the article underneath to understand more!
Leaders Passing the Baton: Choosing and Developing a Successor.
The executive’s role in finding and grooming a successor is perhaps the most important aspect of succession planning. The process starts by assessing the exiting leader’s skills and qualities, which are then utilized to find potential candidates who have similar attributes and skill sets that will benefit the organization’s present and future.
On some occasions, leaders and executives may already have specific peers or employees in mind that will be a great fit for the leadership role, in such situations this works as a great advantage to the process of leadership transition and succession planning. But in the scenario that an organization lacks a suitable candidate internally or through a prior personal relationship, at that point external candidates should be considered. The organization need not worry about whether or not the potential candidate is internally groomed or an external candidate, the important thing is that he/she possesses the skills, commitment, and leadership mentality that will help the organization progress to growth and success.
Once an ideal candidate is identified as a successor, the real work begins as effort will now need to be extended from the outgoing leader to develop that individual into the new leader. It’s important to guide and nurture the prospective leader thoroughly because they will not learn on their own all the organization’s necessary skills, approaches, and methods. The incumbent is the key to transforming the potential successor into a successful future leader of the organization or a failure.
A strategy to develop a successor’s leadership skills is to involve them in the day-to-day responsibilities of an executive. For example, if you are the incumbent, don’t wait until you decide to step down before involving your successor instead delegate part of your responsibilities to your selected successor while you are still on the job. Take the time to walk them around to meet the new team and the key personnel they will interact with in the future. Allow them to attend key meetings so they can see interactions firsthand and experience the battle rhythm of the organization, so they know what to expect. This will help them gain valuable experience while also allowing them to demonstrate their strengths and capabilities, which will elevate their confidence. This strategy will also help identify any gaps that the successor may have in the leadership role and give them the time and opportunities to build their business acumen and any additional skills that maybe required to be an effective leader.
Lastly, retiring leaders and executives should make themselves available to their successors. The potential replacement will probably have many questions, and nobody knows an organization better than the person who built it from the ground up or the person who has run it as a key executive for many years. Thus, it is highly recommendable for the incumbent to guide and train the future leader so that they’re prepared to assume control to lead the organization to perform at maximum effectiveness.
With this preparation the incumbent can pass the baton triumphantly knowing that they have ran their race effectively, finished their course, and prepared for the future success of their organization in a successor waiting in the exchange zone, ready to accept the baton and continue the race.
Successor Receiving the Baton: Preparing for a Smooth Transition.
From the perspective of a successor, it’s tough to be the new kid on the block, especially to be the leader of an organization that has already seen big achievements and success stories from its predecessor. Thoughts about how to fill the shoes of a predecessor, especially ones who have made great contributions to the life of an organization could ultimately breed negative feelings such as uncertainty and distrust in a successors’ own abilities, thereby undermining the organization’s good momentum. A successor should instead use these negative emotions as motivation to prove to themselves and the entire organization why they were chosen to be the new leader of the present and future of the organization. This approach of tackling these negative mindsets with positivity and a can-do spirit will set apart the new leader.
A motivated and committed successor will start their journey to the new organization even before the transition that comes with succession planning. To make the transition process easier on themselves successors of new organizations should not wait for the exact time of the passing of the baton to learn the organization’s processes and procedures. Ways they can make their transition smooth would be by spending significant amounts of time listening to the predecessor and the workforce of the organization in order to comprehend the job and procedures of the organization. Another way is by engaging with the incumbent as often as possible to learn about the role’s responsibilities and the ways to conduct them correctly. Gaining a reservoir of wisdom about the organization before the assumption of leadership control in the future will make the transition process more painless and smoother for the successor.
The last subject to consider is how to bridge the gap between the successor and the clients or customers of the organization they have just taken leadership or control. Especially in scenarios where there has been great trust built between the organizations’ clients and the departing leader as well as successful milestones accomplished together. In such scenarios filling the shoes or replacing the former leader’s years of expertise and contributions is an impossible task. The best solution to effectively create connections and bridge the gap is by creating a new bridge. On this new bridge, the successor can now exhibit their leadership skills, commitment, and dedication to the clients/customers as their new leader. If the successor remains consistent and sincere in this pursuit of building a new bridge eventually the clients/customers will recognize the successor’s effort and trust will begin to grow and develop in those new relationships as well.
Leadership transition is hard and challenging because there are many moving parts, similar to two runners passing the baton in a relay race. The passing and receiving of the baton are the most crucial part of the race. Each participant must be intentional and focused. A dropped baton can cost the team the race, but a successful pass keeps the team on track towards the finish line.
Retiring high-level executives and successors are analogous to the two runners in a relay race. The incumbent being the current baton carrier should do all in their power to prepare the receiver to lead the company to development and success. The successor, on the other hand, should be prepared and committed to taking the baton from the predecessor in order to maintain the race’s momentum and so continue its journey to success.
The Role of HWA in the Leadership Journey
The task of safeguarding the organization’s financial health is one of the responsibilities passed down from the predecessor to the new leader. It is the new leader’s duty now to defend and secure the organization’s overall financial picture.
HWA Alliance of CPA Firms can help your organization with such complex accounting duties. We offer outsourced Controllership and C.F.O services as well as other executive level financial services. We can assure your financial activities are on the right track, elevating your confidence and procedures as a leader. Our experts have an eye toward the future of your organization and will work side by side with outgoing and incoming leadership not only to evaluate the organization’s financial standing and identify potential financial problems but also to create the finest strategic and financial plan for the organization’s better success in such a major transition. We are ready to boost the confidence of the entire organization, including executives, investors, the board of directors, the workforce, and clients, by enhancing an organization’s overall financial health. Be in a position of strength and confidence!
If you want to learn more about our financial management services, click below to start a conversation.