Successful leadership transitions happen every day, but they’re notoriously challenging to accomplish. Everyone feels on edge as a new CEO comes on board and joins the company culture.
This is just as true when the CEO is hired from within and is someone your whole company knows. The transition to executive leadership can be rocky as your staff makes the mental adjustment to having a former colleague as their CEO.
Having the right CEO in place comes with numerous benefits for your company. According to Forbes research, there are nine potential benefits when companies transition to new CEOs.
- Providing a psychological safety net for employees
- Setting a new tone and standards
- Having an embodiment of values
- Polishing up the company’s reputation
- Calming the emotional climate
- Improving company diversity
- Becoming more mission-driven and purpose-driven
A new CEO could be just the boost your company needs to succeed. But what ensures a smooth transition to new leadership? The answer lies in having a transitional leadership strategy in place to ease the stress and complexity of such a significant change.
What is Transitional Leadership?
Transitional leadership is an approach to business continuity that focuses on maintaining resilience and making smooth transitions in leadership while optimizing productivity and minimizing negative outcomes. More simply, transitional leadership gets you off to a good start when someone new is in charge.
Success is found in choosing the right transition strategy for your business. Although there are best practices to follow, transitional leadership isn’t a one-size-fits-all approach. Each business must create a unique leadership transition strategy that suits its culture, size, industry, stage, and so forth.
One of the must-haves in any transitional leadership plan is a succession planning strategy. Below is a more detailed look at what succession plans are and why they’re vital to making successful leadership transitions.
How Should We Start a Succession Planning Strategy?
A succession planning strategy starts with identifying key roles that present a substantial threat to the organization when they’re vacant or when they’re filled suboptimally. Note that at first, the priority should be identifying roles, not people. Pay close attention to all leadership roles that are most essential to overall organizational stability.
The most common examples of key C-suite roles include:
- Chief executive officer (CEO)
- Chief financial officer (CFO)
- Chief operating officer (COO)
- Chief information officer (CIO)
- Chief marketing officer (CMO)
Some companies also have other C-level roles that hold significant power and authority, like:
- Chief compliance officer
- Chief medical officer
- Chief diversity officer or diversity director
- Chief risk management officer or risk management director
- Sales and/or advertising director
- Director of IT
- Building security/safety director
The actual human beings who occupy these roles will inevitably change over time, so the succession plan should stay evergreen. Develop a succession plan by roles first, then move to the next stage of finding the right leaders to fill them.
When it comes to spotting future leaders who are excellent candidates for key roles like the CEO and C-suite executives, look both inside and outside the company. Most organizations have numerous hidden gems of people who could be excellent leaders with some leadership support and skill-building.
Whether you hire from inside or outside the company, attracting and retaining the right leaders involves the dual activities of talent development and succession planning. Talent development, also known as talent management, is different from succession planning and includes tasks like recruiting, offering benefits and incentives, and onboarding new employees.
Together, these concepts form a cohesive set of action steps under the general umbrella of strategic planning at your company. If the organization is struggling to articulate its overall strategic mission, vision, or succession planning objectives, seek help from business planning experts as soon as possible. It’s also a red flag if there’s a strongly negative company culture. Left unchecked, these issues tend to grow exponentially over time.
Need to hire a new CEO now? Work with a skilled succession planning consultant to give your company the best chances of success with leadership transitions.
An experienced consultant knows the pitfalls of losing a C-level leader and hiring from outside. They also know the challenges of hiring an existing employee and making the transition to executive leadership. Your consultant can help your company take every possible step to transition the right leaders at the right times and secure the organization’s future for decades to come.
Planning a CEO Transition
Complex CEO transitions take thoughtful transition strategies. For the best results, experts recommend engaging with full-service strategic planning and succession planning programs as opposed to following simple training programs.
Leadership Resources provides robust leadership and CEO transition management services with proven results for thousands of successful companies. To learn more, please click below to read our whitepaper about improving your organization’s succession planning.
