Eliciting Excellence

3 Strategies to Reduce Your Successor’s Dependence on You

In order to succeed, a successor must possess a strong set of leadership competencies, he or she must stop certain behaviors and adopt other behaviors, and they must be able to function well without the oversight of you, the outgoing owner.  Although most owners feel they’ve done a decent job preparing their successor to take over running the company, the truth is that about 70% of successions fail!  It takes more than a knowledge of the business (production, service, sales, finances) to effectively lead a company into the future.  Here are three of the strategies you can use to groom your successor to reduce or eliminate their dependence on you.

Allow them to make decisions and possibly fail

Two critical competencies a successful owner must possess are good business judgment and the ability to think strategically.  While these competencies come naturally to some, most people need to develop their judgment and their ability to think strategically.

Good judgment comes from our ability to recognize when our emotions and biases cloud decision-making.  When we allow emotions to cloud our judgment, we make decisions that are misguided.  Having sound judgment – unbiased by emotions – allows an owner to make good business decisions.  Strategic thinking comes from our ability to distinguish between symptoms and problems.  Reacting to symptoms leads to using tactics that create new problems.  Developing a strategy that addresses the real problem resolves the problem.

The most effective way to develop judgment and strategic thinking in your successor is to allow them to make decisions on their own with your guidance.  And it’s OK to let them make mistakes (as long as they’re not critical mistakes).  After all, we learn more from our mistakes than we do from our successes.  Start allowing your successor to make decisions and make mistakes so you can help correct their thinking, improve their judgment, and boost their self-confidence.

Share your past mistakes and the lessons you’ve learned

Another good way to help someone succeed as an owner is by mentoring them.  Mentoring is about helping someone appreciate the mistakes you’ve made so they don’t make those same mistakes.  You can share why you made the decisions you did, help them understand the negative consequences of those decisions, and teach the lessons you took away from them.  Not all the lessons learned are self-evident, so by sharing your stories, you’ll keep your successor from making those same mistakes.

Reinforce the culture

Culture is made up of the values and behaviors an organization is known for.  A good deal of a company’s success relies on its culture.  The results obtained from a good strategy will be directly related to the strength of a company’s culture.

A culture of mistrust, lack of respect and a lack of accountability will yield weak results.  Alternatively, a culture of high integrity, good communication, mutual respect and strong follow-through will yield superior results.  Culture is developed over time and is defined by the values and behaviors the leadership tolerates.  A successful successor appreciates the existing culture and will work to strengthen it rather than to change or undermine it.

Don’t be lulled into a false sense of comfort because your successor “knows” the business.  Help him or her develop a complete set of leadership competencies, help them develop the appropriate set of behaviors, and help them become more independent and self-confident.  It’s in your interest and in theirs.

If you’d like help in preparing your successor to take over running the company, please give us a call.  We offer leadership assessments and executive coaching, all designed to help your successor succeed.