Employee Engagement

The focus of succession planning — as the name suggests — is planning the transfer of power and responsibility from the current leader (often the company's founder) to a new generation of leadership (often the children of the founder).

For family and closely held businesses, planning for a smooth transition involves much more than prepping a new leader, getting the financials aligned, and the legal documents signed. A company is much more than products, procedures, offices and warehouses. The lifeblood of every company is the employees — the people who execute the job, represent the company culture and work with customers day in and day out. When change comes for a company, it's not just leadership that's being upended.

Every employee's life is being upended as well. Every succession plan must take the employees into account if the company hopes to achieve a smooth transition — and continue its culture and traditions.

Change Is Constant — and Uncomfortable

Life is always changing, but despite how often change happens, it's rarely comfortable. When a leadership change takes place at a company, the reaction of many employees is one of fear.

• They worry if their job is safe.
• They worry the company culture that is a part of their daily lives won't survive.
• They worry whether the chosen successor will live up to the example of the founder.
• They wonder where, and if, they fit in the new regime.

Most employees — especially those who have been with the company for many years — are not simply there because they have a good job and a good paycheck, but because they believe in the company's mission and the company's leader. If the employees don't believe in the new leadership, they may be apt to seek greener pastures, which can hurt the productivity and culture of the company and mar the early tenure of the new regime.

The following employee-focused tactics are crucial for companies undergoing leadership transitions.

Start Early: It's never too early to begin succession planning. One of the biggest obstacles to executing a successful transfer of power is securing the trust of the employees. Lack of trust is often driven by lack of familiarity. Succession planning should begin at least five years in advance.

During this period, those being groomed for leadership should be heavily involved in the day-to-day operations and decision making — and have direct contact with employees. This period will help new leaders prove themselves, establish their authority and gain the trust of the employees.

Communicate Often: Information vacuums lend themselves to speculation and interpretation — and it is human nature to assume the worst in times of change and uncertainty. Constant communication between leadership and employees is critical to building trust, assuaging fears, and keeping the company moving forward. Leadership — both current and future — should spend a significant amount of time on employee communications, including town hall-style and one-on-one meetings. Information is emotional gold. Any information regarding changes in the company should be communicated clearly and swiftly to employees. Communication is the foundation of trust, and ultimately, a successful company.

Get Buy-in: Employees in companies undergoing change tend to trust their peers more than they do new management. That's why it's important to secure the buy-in of influential employees. Companies can “influence from the middle” by involving certain employees in major decisions that affect the company and its workforce. Securing the buy-in of influencers will help new leadership win the trust of the workforce at large.

Shape the Future: High employee retention is crucial to a successful succession — but it doesn't mean that 100% of employees will — or should — be retained. Part of a good succession plan is identifying the strengths and weaknesses of the company and its employees, and make the necessary adjustments to ensure the company is on solid footing before the transfer of power takes place. Conducting individual interviews and reviewing roles and responsibilities can help identify which employees are crucial to the company going forward, and which are not. No single employee is irreplaceable — if the company is prepared.

Big changes affect more than the incoming and outgoing leaders and the bottom line. They affect dozens, hundreds and even thousands of employees' lives. Incoming leaders who demonstrate empathy towards employees, and work with them openly and honesty, will garner trust and loyalty as they move their company toward its next incarnation.

Denise P. Federer, Ph.D. is founder and principal of Federer Performance Management Group. She has 27 years of experience working with key executives, business leaders and Fortune 500 companies as a behavioral psychologist, consultant, coach and trainer. Contact her at: [email protected]