How to choose your successor
Find the right candidate to lead your business after you exit.
One way to choose your potential successor is to consider the various people within your organization who might make strong candidates, debate their merits, and then make a choice. However, there's a better approach that begins not with the performance of others, but with the vital qualifications needed to run your business.
Evaluate your position
Instead of a critical diagnosis of a senior coworker's job duties, responsibilities, or skill set, begin with an analysis of your own job:
What are the skills and experiences required to do the job well?
What are the business's needs now and in the future?
What new areas of expertise will be necessary by the time a new leader takes charge, based on emerging technology, marketplace trends, etc.?
Can these skills and expertise be instilled in an existing employee?
"The skills needed to run the organization in the future might not be the same as they are presently," notes a 2014 report on succession planning by Stanford University and The Institute of Executive Development. "Executive talent should be evaluated in terms of its ability to meet future — not just past or current — needs."1
Assess your staff
Next, begin to evaluate your current staff in search of the traits and skills you've identified. But keep in mind that your employees aren't finished products. Because a practical succession plan begins years in advance of an anticipated change in leadership, you have time to train your prospective successors.
"When you're identifying those superstars within your company, look both at the skill sets they have and then also those that they need to develop," says Janice McNulty, Global Enablement Program Manager at Saba Software, a provider of talent management software. "Once you have identified the gaps, development planning becomes the bridge."
Once you know the profile of the candidate you're seeking and the approximate timing of a leadership change, plan to train your prospects in any missing skills so they're prepared in time for the transition.
Consider external candidates
As you cultivate an internal pool of potential successors, consider hiring new talent from outside your company who may possess the characteristics you seek. And if you do consider external candidates, bring them into the fold well before the transition. Should one become owner, the process will be smoother and less expensive if you can start his or her training sooner rather than later.
If you begin by carefully establishing the profile of your ideal leader, you'll be well-positioned to identify your successor regardless of whether they're already in your ranks. Learn more about structuring your succession plan the right way.
1 "2014 Report on Senior Executive Succession Planning and Talent Development Survey." Institute of Executive Development and Stanford University. (2014) http://www.gsb.stanford.edu/faculty-research/publications/2014-report-senior-executive-succession-planning-talent-development