A Brighter Way
A Brighter Way
Transitioning to new leadership can be difficult for any business, but a solid plan and advanced preparation can help.
When CEO Tim Michel announced his intended retirement date, Rea & Associates applied the same advice we give our clients to our own transition. And while Lee Beall, currently an executive vice president of operations, won't take over the helm until later this year, he has been preparing for the switch for months.
Here are some of the items we considered when deciding how and to whom to transfer leadership. If a transition is in your future, you should think about these issues, too.
It's never too early to plan for a transition, and the more advanced notice you have the better. In a normal transition plan, a successor CEO should be named one year prior. Luckily, Michel gave a two-year notice.
"I wanted the firm to consider all options and ensure whoever became CEO had adequate time to transition their responsibilities to others," Michel said.
Obviously, the timing and willingness of the retiring person to assist in the transition is important, and cooperation should be encouraged.
Start with a detailed succession plan that includes assignments to create accountability. It should also include a clear communication plan for employees and external audiences.
"The plan should include a revised organizational chart, new job descriptions for any affected positions, a timeline and a transition team," said Mike Taylor, executive vice president of operations and a member of our transition team.
To keep the team on track, be sure to schedule regular planning meetings, too.
When determining how to transition your business, you must start with some tough questions: Who is best suited to lead the company? Should the responsibilities be divided? What is the time frame for the transition? And who will be responsible for ensuring an orderly transition?
You must also ensure the responsibilities of the role are completely understood. In our case, the firm defined the role of the CEO and looked for a leader that best matched the desired results.
Candidates were tested to see who was best suited to the position, Michel said. Important factors included vision, passion, leadership abilities and business sense. We also looked at current roles and how easily those responsibilities could be transferred.
"Transitions are never easy. There are going to be bumps in the road, and not everyone will be happy with the decision," Taylor said.
It is critical to communicate all transition options to those affected by the succession so they can have input on the direction of the plan. Don't underestimate the power of your business's culture, either. People want to know that the company will continue to do the right things.
"Nothing can affect your business more negatively than if your culture deteriorates during the transition," Michel said.
By selecting a new CEO who understands the Rea culture, and working to transition well in advance of Michel's retirement, we are taking the necessary steps to ensure smooth sailing for our valued employees and clients.
"It's our third transition as an organization and the process continues to work," said Taylor.
This article was originally published in The Rea Report, Fall 2008 issue.
Note: This content is accurate as of the published date above and is subject to change. Please seek professional advice before acting on any matter contained in this article.
