If you own your own business and are successful for any length of time, eventually you will be faced with a leadership transition. Maybe it’s you personally who are ready to move on, or perhaps a situation arises for someone on your team. No matter when it happens, leadership transition is fraught with anxiety, stress and potentially harmful impacts to your customers and your business. To put the odds in your favor of pulling off a successful transition, keep in mind the following points.
- Think well ahead. The time to think about a leadership transition begins years before you need to execute a change in leadership. Developing people to assume a leadership role can involve giving them one or more job rotations and careful mentoring and coaching in these roles. A key job responsibility for any business owner is to ensure the survivability of the firm. Job one is to make sure you always have capable leaders in place, and to always be developing a bench of leadership competency.
- Plan for every key position. For all key leadership roles, have a plan. A good plan should include someone who can step in immediately, someone who is 1-3 years away from being ready and several who are in the pipeline 3+ years away. As time goes on and people develop, update your list to reflect your bench strength.
- Assess your talent. Taking the time to both qualitatively and quantitatively assess your leadership bench can not only save you from making poor decisions in appointing leaders, but it can provide an outstanding development roadmap for leaders to close gaps and improve performance. A good qualitative approach is to perform 360 interviews from people who interact with potential leaders. Two excellent quantitative assessments are the Hogan Assessments (www.hoganassessments.com) and The Leadership Circle (www.theleadershipcircle.com). Both of these will provide insights into the probability of success for a candidate in a leadership role, as well as inform a prospective leader what to work on to improve.
- Consider what must change / stay the same. In any leadership transition, there is always a period of time where there are questions about how things will change. As you think about leadership transition in your dealership, take the time to think through 2 critical questions: 1) What must remain the same, and why? and 2) What must change, and why? Take advantage of the leadership transition to do the best for your organization by keeping the good things and likewise initiating change where needed.
- Communicate with emerging talent. Let potential leaders know you are interested in developing them for leadership roles. It will impact how they do their job, and how they view their own development. In some cases, people will self-select out and inform you they do not wish to be considered for leadership roles. If you are lucky enough to have several capable leaders competing for a leadership role, it is important to communicate to those who do not end up receiving a promotion. Let them know how you made the decision, where they could have done better, and what support you can offer to them for their future development. The key is to always stay close to your emerging talent and ensure they are developing in ways that bring out their ultimate potential, while also positioning them to take on positions of greater responsibility in the dealership.
- Communicate with stakeholders. As you make changes in your organization, make sure you keep in mind all the stakeholders who interact with your business. If you have a board of directors or advisors it is always a good idea to notify them in confidence of your thinking and to solicit their input/advice on the process of leadership transitions. Think carefully about all of your employees and how they will react to any leadership changes. Think about your customer base and how they should be notified of changes in your leadership. Keep going through your business and make sure you have a communication plan that is adequate to keeping everyone informed.
- Expect resistance. As new leaders get into place it’s inevitable that with a changing of the guard will come some resistance to doing things differently or taking direction from a new leader. This is somewhat normal and should be expected and planned for. The appropriate approach to manage resistance is to welcome the conversation — maybe even promote it through town hall or all hands meetings to get questions out in the open. Getting the resistance in the light of day will be an opportunity to help everyone learn at the same time and hear directly from leaders how decisions were made or why a certain direction is being taken. Encourage the debate and engagement, up to a point. If someone is set on undermining new leadership despite all the above, perhaps it may be time for people to move on.
- Plan for ongoing support. Expect there to be a break-in period of 3-6 months. Build into this timeframe some type of mentoring, coaching or professional feedback loop that verifies things are headed in the right direction. A best practice is to put a meeting out for 6 months where the agenda is “what is working, what is not working and what needs to change” and give people the opportunity to bring up difficulties without seeming obstructionist or negative. Make it part of the process to receive ongoing feedback and provide the necessary support for a new leader to learn the ropes. Keeping things in the dark will foment distrust, but bringing questions and concerns to light in real time will create trust.
Planning for and executing leadership changes is one of the most challenging aspects of running a business. Every single instance has its own trials, tribulations, as well as rewards. Planning ahead, and considering the points above, will position you and your business for success.
