In the last few years, the business and financial press has forecast a kind of Armageddon of aging in which health-care sucking, unproductive 80-year-olds vastly outnumber healthy productive tax-paying young folk, creating an economic meltdown.
This vision is sometimes called the “grey tsunami.” It is generally applied to fears about an aging population, but it’s also applied to the projected massive turnover of employees and whole businesses as their owners sell out (or fail to sell out, and just shut the doors).
This narrative is simplistic. It may also cause us to miss an important fact: When
we think of succession only as a process around the foreseeable retirement of business owners, we risk missing an important fact about the growth of a business — succession actually happens any time anyone leaves any role, planned or unplanned. In response, we have to succession- proof our organizations to minimize the risk of turnover and to maximize the opportunities turnover can create.
MINIMIZING RISK
People leave. Get over it. One of the more annoying stories we keep hearing is how “young people these days don’t have the loyalty we did.” Nonsense. I can’t count the number of jobs I had between the ages o18 and 28. And that was between 1977 and 1987. I was exploring, failing, getting pissed off at crappy employers, jumping to better opportunities (and getting those wrong half of the time). In other words, I was doing what any self-respecting 20-something does. Nothing new here. Move on.
If the departure of a 24-year-old employee is a disappointment, a surprise or a threat to your business, you’re doing it wrong. The normal behaviour of human beings should not be a threat to the growth of a business.
Starbucks figured it out long ago: Young people move on, so adjust your business model to deal with that reality instead of wringing your hands. Mitigate the risk of departures by reducing the frequency and reducing the impact on the business when someone does leave.
That’s effective succession proofing.
MAKING IT WORK
There are two areas where organizations must look to begin the work of succession- proofing:
• Culture: The three foundations of a healthy culture that truly nurtures employees and retention are (psychological) safety, purpose and belonging (my variant of Dan Coyle’s work as described in his book Culture Code). Most organizations lack the controls to ensure safety or have not done the work to connect people with a purpose. The consequence is inevitably reduced productivity, followed by accelerated turnover.
• Alignment: Most employees I talk to don’t understand how their efforts align with the results their organization is seeking. Most feel like they are guessing the right way to do things or the right place to put their efforts. And when they guess wrong, there are negative consequences. When you start to dig beyond the bewildered shoulder shrugs, people have very little idea how their efforts, skills, compensation or advancement line up with what the organization wants. It feels random and capricious.
MANAGING CHANGE
When someone does leave a business or organization, reducing the impact is largely about effective knowledge transfer. Most organizations have such poorly developed training processes that when someone leaves, starting over with a new person takes months before a return to full productivity (which is just around the time the new person leaves).
The fix means hard work, but it’s simple. It means improving the standardization- training cycle. Build onboarding and training programs that not only bring a new hire to full productivity in the shortest time possible, but also evolve to support continual employee and organizational growth.
Remember in primary school when your teacher asked you to lie down on a long piece of white paper and had another student trace your outline? You then coloured the outline in, put your name on it and the teacher tacked it to the classroom wall?
That outline always comes to mind when I think of the senior leadership positions in many successful businesses. The CEO, CFO, COO are often the only people who ever held those positions in the history of the business. So when you try to write a description of their activities for recruiting purposes, you’re not describing the activities of a generic CFO, you’re describing the unique combination of the skills and traits of the incumbent.
This creates a problem. The incumbent, as a unique human, is literally irreplaceable. So instead, you must reimagine the role in a way that it can be filled by another CFO, not a clone of the incumbent.
There are three opportunities created by an organization willing to embrace them.
Improved redundancy: When a single person is our only line of defence in business, we have a problem. That person can never get sick or take a holiday. Succession
creates an opportunity to redefine the role so that decision-making responsibilities are distributed across two or three positions. We hire another CFO, but with responsibilities redistributed, especially at the tactical and operational levels, across a flatter team. We often hear “When the original CFO leaves, we are going to have to replace them with two or three other people!” Like that’s a bad thing.
It isn’t. It is a growth opportunity to create a more distributed, collaborative organization.
A change of heart: No matter how good any of us are, we are just us. Our experiences and skills, no matter how exceptional, generate only one perspective. New blood, new minds, new hearts create the possibility of new perspectives.
Operational refresh: Along with the person who has occupied a role for decades comes a host of possibly wasteful and risky processes. That’s why each opportunity to redefine or restructure a role should involve asking “Should someone different be doing this?” but also “Should we be doing this differently?” Many of the processes associated with long- held positions can be improved through digital tools, AI and other forms of automation.
Succession proofing isn’t just about retiring — it’s about creating more resilient, effective, creative organizations by looking at every position and process as an opportunity for change.
Clemens Rettich is a business consultant with Grant Thornton LLP. He has an MBA from Royal Roads University and has spent 25 years practicing the art of management.
This article is from the April/May 2020 issue of Douglas.
