Many leaders throughout the A/E/C industry are currently working through issues of succession. They are trying to answer the question, “How do I effectively transfer leadership of my business from one generation to the next?” This process is fraught with risk, as the wrong decisions here can lead to the end of the business. And yet, many leaders are unsure of the path forward and struggle with creating a smooth transition.
The uncertainty around how to identify, develop and transition from one generation of leaders to the next can create major issues. Some leaders become paralyzed by the uncertainty of how to proceed and do nothing. Some leaders skip essential steps and then must backtrack, wasting significant time and resources. Some leaders identify the wrong people or promote individuals who are unprepared for the new role and suffer the consequences.
Oftentimes, leaders feel an urgency to identify and develop their successors, so they leap right into it. They pick a group of high potentials and start looking for developmental opportunities for them. For example, a large specialty contractor in the industry felt an urgent need to begin developing its leaders, so it spent considerable time and resources to start developing those individuals. While the individual leaders did build leadership skills, there was no clear direction or specific leadership skills outlined for the successors.
Developing people is an essential aspect of succession management, but this company skipped a foundational aspect of succession that can set the entire process up for success or doom it to failure. While it might seem counterintuitive, the critical groundwork that must be established first is an organizational vision.
As first defined by Jim Collins in his seminal work, “Built to Last,” an organizational vision is comprised of these four components:
- Core Purpose—Defines why the organization exists, beyond just making money.
- Core Values—Define how everyone is expected to behave, what filters to use when making decisions.
- Big, Hairy, Audacious Goal (BHAG)— The 20-year overarching strategic goal.
- Vivid Description—Very specifically, what the organization looks like once it has accomplished the BHAG.
Enduring Organization Model
What does organizational vision have to do with leadership succession?
A Road Map to Follow
First, by firmly establishing the organization’s vision, you are ensuring the next generation of leaders has a road map to follow as it transitions into leading the business. The BHAG and vivid description outline where the organization will be in 20 years. This will help directly inform the identification and the selection of successors for the business, by clearly defining the skills needed by future leaders to take the company where it needs to be. Moreover, when the next generation begins leading, it will protect the core purpose and core values, or those aspects of the company that make it special. When clarified well, the purpose and values remain in place. By establishing them early, you ensure the next generation of leaders understands what must be preserved and not changed. With an organizational vision, the next generation of leaders now has a guide for where to take the organization. Every step won’t be identified, so these new leaders will still have ownership and authority in leading the business, but they have a road map to help them navigate through the uncertainty.
A Powerful Way to Grow
Second, by including next-generation leaders in the process of clarifying an organizational vision, you will ensure that it has a powerful developmental opportunity. To be able to think strategically about the organization’s vision, to clarify the ideas and words and communicate that to the organization—those experiences will shape the next generation in profound ways. It provides next generation leaders with a real organizational challenge that they can overcome and grow from.
A Lens to Pick the Right Leaders
By clarifying the vision before beginning the process of transitioning from one generation to the next, you can select the right leaders and provide them with the tools they need to be successful during their transition. They will understand those aspects of the business that must be preserved and protected, as well as the areas that will need to be changed to achieve the long-term goals.
Skipping this step is a major mistake. That is exactly what the specialty contractor learned the hard way. Two years into the leadership development process, it realized that it wasn’t building leaders toward the specifics of leading its business into the future. Yes, every leader in the program benefited from the development, but those individuals needed a more focused approach to follow. When the firm took a deep look at its vision, it recognized that its two biggest needs were to vastly increase its technological expertise and to expand the business into new geographic markets. The leadership skills needed to take the organization in this direction were very different than the ones it had spent two years building. Sure, the company had stronger leaders, but it didn’t have the right leaders to lead the business into the future. This created an even bigger issue, because the organization had to reconfigure its leadership development efforts and lamented not starting down this path sooner.
Many employees are fearful of the change associated with leadership transition. They fear losing what made the company so attractive in the first place. They are also afraid that the new leaders may take the business down the wrong path. That is why often you see higher turnover as one generation of leaders departs and the next takes the reins. However, by developing a clear vision, you can set the next generation of leaders up for success. You can preserve what made your company what it is today, while focusing on what’s needed for the future—all the while taking active steps to perpetuate the business.