A well-prepared successor is essential for a smooth transition and is critical for continued growth and profitability. The question then, is how do you determine whether a successor is ready to take over? What is the “Litmus Test” that will reveal their degree of readiness?
The answer is that there is none.
There is no one “test” that will reveal their preparedness. Rather, there are several things (you can call them tests if you like) that will reveal just how competent they really are. Here are a few suggestions you can use to evaluate your successor:
Vision: Ask your successor what his or her vision is for the future of the company. Do they talk about maintaining or do they talk about growing? Do they talk about changes they’d make? Do they talk about the company’s culture? Do they have an eye on the customer and the competition?
Any and all of these issues can and should be an essential part of someone’s vision for the future of the company. By listening to what they talk about and listening for what they don’t talk about, it will reveal whether they’re beginning to think like an owner.
Strategy: When an issue arises within the company, ask your successor how they would resolve it. Help them to differentiate between problems and symptoms. Help them differentiate between strategies and tactics.
If they attempt to “solve” a symptom, the solution almost always makes the situation worse. Help them to understand that before a strategy can be developed, the underlying problem must first be identified. Once the true problem is uncovered, the best strategy almost always presents itself. Helping them understand these insights will help keep them from developing poor initiatives.
Decision-Making: Making sound business decisions is key to the future of the business. Good decision-making requires business savvy, sound judgment, and the ability to see the bigger picture.
Have your successor start by making less critical decisions. As he or she demonstrates competence, allow them to participate in decisions that have a greater impact on the company. Coach and mentor them on how to make better decisions. Only by helping them make course corrections can you hone their decision-making abilities.
Judgment: There’s only one real way to test their judgment. The one true test of judgment – after all the other development has taken place – is to leave.
Ask yourself how long you’d be comfortable being away from the business. And then leave. At first, it may be for a few days. Then a week. At some point, it may be that you can stay away for two weeks or even a month. The truth is that at some point, when you retire, you will be away from the business all the time.
If you’re not comfortable with staying away for an extended period of time, it’s generally due to one of two things. Either your successor isn’t yet ready to take over, or you aren’t prepared to let go. Either way, something needs to change if you want a smooth and successful transition.
If you’d like help preparing your successor, please give us a call. We specialize in successor assessment, successor development, and successor recruiting.