Making a difference: Jim Casper
Business support is critical to alleviating blood shortages
November 1, 2023
There has been much written about the largest wealth transfer from the baby boomer generation to their children/family – which is an estimated $30 trillion.
Never in the history of the United States has such a vast amount of wealth moved through the hands of generations.
However, there is another large transfer taking place among generations we’ve heard little about – the transfer of company leadership.
At this time, 10,000 baby boomers hit retirement age every day.
As more of them move toward retirement, they are looking to transition out of their role smoothly and let the next generation of leaders take it from there.
Our own metrics show this as well.
We continue to see an increase in calls from leaders wanting more information on the leadership transition/succession process.
What jumped out to me most about these conversations is that the leaders have a clear plan for the transition of the ownership of the company, but have less clarity on how the transition to the next generation of leaders will happen.
?Without a clear leadership team transition plan, the company often gets stuck.
The outgoing generation of leaders gets concerned about the transition as they want to leave the company in a great place and solidify their legacy in the history of the organization.
However, sometimes, the incoming generation, out of respect for their predecessors and what they have built, may hesitate to assert their leadership – not wanting to step on any toes and risk a negative impact on the relationship.
Sometimes, incoming leaders struggle to understand what their leader is thinking regarding the transition.
Here are three steps leaders of the outgoing and incoming generations can take together to help create clarity for all:
Complete team development exercise
This exercise can help foster a deep understanding of each other and how to effectively communicate and work together.
The process helps establish a foundation of trust, enabling candid and vulnerable conversations needed to work through the most sensitive issues of the leadership transition process.
Building and maintaining healthy relationships across the team are essential to a successful transition.
Create three-year strategic, financial vision
The second step is defining a shared vision for the organization.
What does the outgoing and incoming leadership team want the organization to look like in three years?
The strategic vision can help create alignment and clarity, serving as a target for all decisions, especially people decisions.
It may help provide the incoming leaders with the guardrails to take action and lead the organization with confidence while providing outgoing leaders with the comfort to continue to back away from the business as long as the company is on track to achieve the vision.
Create three-year leadership team talent plan
With the strategic vision in place, organizations can now develop a Leadership Team Talent Plan.
A talent plan helps define strategies and actions to develop the team from where it is today to where it needs to be to achieve the three-year vision.
The outgoing leaders’ exit strategy is an essential component of this plan, ensuring they leave on their own terms while passing the baton to the incoming leaders.
The Leadership Team Talent Plan also includes development plans for all leaders – which focuses on growth areas to help them effectively lead in their new role.
The development plans for the outgoing leaders include action plans to help them optimize their exit and live the life they want in retirement.
High role clarity can help reduce frustration and maintain healthy relationships, enabling incoming leaders to tap into the experience of their predecessors.
Effective transition planning also allows outgoing leaders to shape their legacy positively, leaving the organization in a strong position.
Ultimately, a smooth leadership transition enhances business value, share price and overall organizational performance.
As organizations navigate the largest transfer of wealth and leadership from the baby boomer generation to their successors, it is crucial to prioritize effective leadership transition planning. By fostering open communication, establishing role clarity and developing a talent plan aligned with the organization’s strategic vision, organizations can help ensure a successful transition.
