The Hidden Gap
When a regional VP was promoted to CEO at a 600-person civil engineering firm, he arrived with strong relationships and a fresh perspective. What he saw, however, gave him pause.
The company had been remarkably stable at the top—seven C-suite leaders with almost no turnover for over a decade. But that stability came with a hidden cost: no one had been thinking about who would step up next.
There was no succession plan. No development pipeline. And when we helped the team dig into the details, the gaps were even wider than expected.
The Hidden Vulnerabilities
In just two days of our Succession Blueprint workshop, we uncovered several blind spots:
One regional VP was seen as the “heir apparent” for three different C-suite roles. But he could obviously only fill one—if any-because...
That same VP had no one ready to take his place. Promoting him would leave his region unanchored.
One critical C-suite role had no viable internal successor at all (and leaving the position unfilled could open up the company to lawsuits).
The company was short on talent.
Because they had never built a plan to develop it.
The Fix
We worked with the CEO to:
Identify immediate and future successors for every C-suite role.
Create development plans tailored to each individual.
Launch a strategy to train eight potential regional VPs (expecting four to fall away during the development process).
Recommend immediate hiring for one C-suite “orphan” role.
Build a four-year leadership development curriculum for the entire organization (at the CEOs request; he didn’t want to have to go through this again – he wanted surety and security).
From risk management coaching to business acumen courses, the leadership team now has a playbook to strengthen their bench at every level.
Lessons Learned
Long-term stability can mask long-term vulnerability.
One superstar isn’t a strategy. Replication is key.
Leadership development is a long game—you can’t cram for it.
Actions You Can Take
Audit your bench. Who’s ready now? Who’s next?
Identify irreplaceables. Then build depth behind them.
Create role-specific development plans instead of generic training.
Don’t wait for turnover. Prepare leaders before there’s a vacancy.
Succession planning isn’t about replacing people. It’s about protecting your company’s future.
Why Transparency Builds Better Leaders in Construction
The strongest leadership pipelines aren’t built in secret—they’re built in the open. When employees know what it takes to lead, they step up. But in too many construction companies, succession planning feels like a closed-door conversation. And that silence? It’s costly.
Here’s what happens when you don’t share the plan:
A mid-size construction firm lost a senior superintendent—not because he was unhappy in his job or got a better offer elsewhere. No, he left because no one told him where he stood. He thought the quality of his work and his dedication to the company would earn him a promotion. But when an opportunity arose, the replacement came out of left field. The company never defined what they were looking for in a leader or how to earn a promotion. He thought he was doing the right things – but who knows?
If you want your people to stay, grow, and lead—they need to see the path.
1. Make Leadership Expectations Clear
Most companies evaluate potential leaders… but keep the criteria vague or private.
Define what “leadership readiness” means in your company
Include technical and behavioral competencies
Share this framework with everyone—not just execs
Pro tip: Use it during performance reviews to set real targets for growth.
2. Make Leadership Development Everyone’s Job
If managers aren’t growing others, they’re not really leading.
Include “developing future leaders” in job requirements
Ask: “Who did you mentor this year?”
Reward those who delegate, coach, and elevate others
It’s not just about doing the work—it’s about passing the torch 🔦.
3. Give Feedback That Connects Today’s Wins to Tomorrow’s Roles
Praise is good. Targeted praise is better.
Good: “Nice job staying on budget.”
Better: “That’s the kind of financial discipline we expect from our senior leaders.”
Link daily actions to long-term leadership potential. People pay attention (and do more of “it”) when they see the connection.
4. Be Honest About Succession
It’s OK to not have all the answers or a fully-baked plan – just say so.
“Our preference is to promote from within—here’s what we’re looking for,” (see tip #1).
That’s transparency. And it builds trust.
The Bottom Line? Show People the Future.
When you make leadership development visible and intentional, you send a powerful message: “We believe in your potential.”
In construction, where experience and loyalty are everything, that message keeps your best people engaged—and building for the long haul.
*This newsletter is excerpted from a larger article written for the Construction Management Association of America.
Everybody Is Retiring!
When two long-time engineers stepped into ownership roles at a 30-year-old construction management firm, they inherited more than new titles.
They inherited a big problem.
Within weeks, the new president realized something alarming: nearly half the leadership team was on track to retire within five years—and there was no one prepared to take their place.
There was no leadership pipeline.
No succession plan.
No one tracking who had potential or interest in stepping up.
And no strategy in place to build the skills required for future leadership.
But they did have one major asset: an eager HR director and a dedicated training coordinator who were ready to do the work—once they had a plan.
How The Training Doctor helped
Over six months, we helped the company create a sustainable internal development program. That included:
Technical career paths that linked to leadership tracks
A three-year leadership development curriculum (not overwhelming – just slow and steady wins the race!)
Coaching and mentoring practices
Peer-to-peer cohort learning
On-the-job practicums
And a plan to purchase a learning management system (LMS) to track progress
Analyzing their exit data revealed that nearly 100 technical staff—including project managers—had left in the prior five years. WHY? A lack of visible career advancement and leadership development was a key theme.
We also surveyed 60 PMs to ask what leadership skills they felt they lacked, then benchmarked six competitors to see how they developed their future leaders. The result was a curriculum focused on communication, business development, leadership, and industry knowledge.
Lessons Learned
Retirement risk doesn’t go away with leadership changes – you have to keep looking “down the line.”
Career advancement needs to be visible and structured, not left to chance.
Actions You Can Take
Start by mapping out retirements. Know when key people plan to leave.
Ask your team what they need to learn, in order to lead. They know what skills they’re missing.
Don’t focus solely on C-suite changes. Develop leadership at all levels—especially in the field.
Build now. Leadership turnover is inevitable. Preparedness isn’t.
Succession Planning Isn’t Invisible
Selling consulting services can be tough—because you're selling something intangible....almost invisible.
But that’s not true with succession planning.
The ROI of Succession Planning is off the charts.
Here are just a few ways succession planning saves—and even makes—your company money:
🔹 Save on Headhunting
Ever had to recruit a senior leader from outside the company because no one internally was ready? That can cost you over 200% of the position’s salary, according to SHRM. So that $100K hire could cost more than $200K, before factoring in the ramp-up time or cultural misfires.
Internal candidates, on the other hand, already understand your company’s way of working. They onboard faster, reach productivity sooner, and often cost less to get up to speed.
🔹 Improve Retention
When employees see a path forward, they stick around. LinkedIn reports that 94% of workers would stay longer if a company invested in their career growth. Succession planning is career development—it helps someone grow from entry-level to manager in a few years. That saves on turnover, retraining, and lost productivity.
🔹 Reduce Risk
Unexpected exits are no longer crises. When you’ve done the work, you can say, “It’s a hiccup, not a disaster; we’ve got someone ready.” Succession planning acts like an insurance policy—it doesn’t stop the unexpected, but it ensures you’re not blindsided.
🔹 Gain a Competitive Edge
Companies that cultivate internal leadership pipelines are more agile and more resilient – because they’re not scrambling – they already have someone with the right capabilities and context (context is also invisible, but it’s uber important!).
Here’s a perfect example:
Remember when the CEO of United Healthcare was killed? The US company did not have a successor in place. Instead, they had a UK executive from their parent company take over running the US operation.
Did he know how to run a healthcare company? You bet.
Did he know how Medicare Advantage plans worked? No. No clue. Why would he know? He came from a country with universal healthcare.
The former CEO died in December … by April the company had withdrawn its earnings projections and the UK CEO had resigned – because he didn’t know what he was doing … in America … he did not have the context of how the operation ran.
Bottom line:
Succession planning may not be flashy—but it delivers. It’s a strategic move toward business stability, talent retention, and long-term strength. And that’s an investment that will pay you back again and again.
*This newsletter is excerpted from a larger article written for the Construction Management Association of America.
ALL the Fallout: What Happens When a Key Person Leaves Your Business
I've heard a lot of "chatter" this past month regarding "fractional executives."
They are all the rage these days.
And not in a good way.
Fractional executives are necessary when a key leader leaves a company and there is no one who is capable of replacing them.
Is that a risk you want to take?
It surely means you (the business owner) are not in the driver's seat.
More often than not, running an independent business means relying heavily on a few key people. But what happens when one of them leaves?
Whether they resign, retire, or become unavailable unexpectedly, the ripple effects can be serious. For many businesses, losing a key employee isn’t just inconvenient—it’s a real threat.
Here are just a few of the risks off the top of my head....
1. No One Else Knows What They Did
If a key person leaves and takes all their knowledge with them, your business can hit a wall fast. Maybe they handled the books, managed operations, or had deep relationships with customers or vendors. If their role isn’t documented or shared, you're left scrambling.
2. You Might Lose a Key Customer
Some customers stick with your business because of the relationship they have with that person. If they leave—and especially if they go to a competitor—that customer might follow them. It's not just a lost relationship - it's lost revenue.
3. Operational Bottlenecks
When one person is the only one who knows how something works— a system, a supplier process, or a critical workflow—they become a bottleneck. Once they’re gone, that knowledge gap can slow down or stop operations entirely.
True Story: A few years ago, I was working with a senior leadership team of nine. As I got to know their roles and responsibilities better, I realized there was one guy who was a huge bottleneck. He was great at what he did and had been doing it for almost two decades; everybody left him alone and nobody could really explain what he did. I realized that he commanded so much of the operation (which meant he commanded a lot of the revenue!) that if he got hit by the proverbial bus tomorrow, that company would have had to downsize immediately. He was one of leadership team of nine, but truly, he kept the operation running.
4. Loss of Institutional Knowledge
Every small business runs on a mix of formal systems and informal know-how. That includes client quirks, vendor tricks, and workarounds that never got written down. When a key person leaves, so does all that off-the-books knowledge.
True Story: I have a fellow consultant friend who does what I do - but with buildings. Huh? Let me explain: Right around the time that I realized companies were losing a lot of leadership capabilities, he realized that the facilities managers and building engineers who were retiring were also taking a lot of knowledge about the building with them. When was this wall erected? What's behind it? When was the last time the furnace was replaced? What's its remaining life expectancy? Where are the sewer pipes? Does anybody know where the blueprints are for this building? etc., etc.
Pretty neat, huh? Your key people aren't always leaders in the company. See this video for more on key roles and key people.
5. Morale Takes a Hit
People talk. When someone important leaves, the rest of your team may wonder why. Was it burnout? A better offer? Trouble in the business? This uncertainty can lower morale—and might even lead others to start looking around.
True Story: Working with a small engineering firm last year, we consistently told the CEO that he had to make some kind of announcement regarding why we (consultants) were there. He scoffed that it was unnecessary - they were like family and would surely come to him if they had concerns. He changed his tune when a key division leader left just two months into our engagement, because he was going to a "safer" job with the state.
6. Overload on the Remaining Team
Their work doesn’t just disappear. It gets passed on to others who may already be stretched thin. That creates stress, leads to mistakes, and can cause more turnover if you're not careful.
7. Projects Get Delayed or Cancelled
If they were managing key projects or had specialized skills, progress slows. Deadlines get missed. Customers get frustrated. And recovery takes longer than you think. In the case of the company mentioned in #5, above, the company simply shut down the division. The employee who left was the only one who knew the direction of the division he was starting up.
8. Leadership Vacuum
Sometimes a key person doesn't have a "fancy" title. They’re the informal leader—the problem-solver, the motivator, the one people turn to. Losing them can disrupt team dynamics and create confusion about who’s in charge.
9. Cost of Replacement
Hiring isn’t cheap. You’ve got recruiting fees, lost time, onboarding, and training. And it can take months for a new hire to get up to speed. All of that affects your bottom line.
You can’t prevent people from leaving, but you can prepare for it:
Document roles and processes. Start writing things down. Even a simple checklist or shared doc can go a long way.
Cross-train your team. Make sure more than one person can handle each critical task.
Build strong customer relationships across your team. Don’t let one person be the sole connection to key accounts.
Have a succession plan. Think ahead about who might step in—and what they'd need to succeed.
Losing a key person doesn’t have to be a crisis—but only if you plan ahead.
This article was originally posted on LinkedIn.
Succession Planning is Business Continuity Insurance
You have insurance, right? You’ve got life insurance, health insurance, car insurance — maybe (hopefully!) business liability or E&O coverage.
So why wouldn't you “insure” the continuity of your company?
Planning for the future wellbeing and care of your business — through proactive succession planning — is a form of insurance, too. It protects not just your livelihood, but the people who depend on your company every day: your employees, clients, vendors, and partners.
Let’s play this out. What’s your plan if a key team member suddenly gives notice? Or gets sick? Or moves out of state for a spouse’s job? Or just burns out and walks away?
Do you have two or more individuals who could confidently step up — even temporarily — to fill that gap?
Or would the company be “dead in the water” while you scramble to rewrite the job description… because so much of what that person did was stored in their head like a vault?
If there’s no documentation, no cross-training, no designated second-in-command… you’re not just down a person. You’re down momentum. You’re down knowledge, relationships, trust, and time. AND if you have to hire someone from outside the company to fill the role, you’re down a lot of money too.
Succession planning helps you avoid that kind of scramble. It’s not just about preparing for retirement — although that’s important. It’s about building internal bench strength, identifying future leaders, and creating a safety net for your operations.
And no, it doesn’t have to be complicated or formal or time-consuming.
It can start with small steps:
Create accurate job descriptions ASAP
Start with the current job description and the incumbent in the role. Ask them to edit the description to “bring it up to date.” Ensure they add anything they are currently doing that is not in the description.
Then, ask them to take a second pass and estimate the amount of time they spend on each task per week or month (e.g. I usually spend 4 hours a day answering customer inquires via phone or email. Four hours per day, multiplied by five days per week, equals 20 hours or 50% of the work week. Now you know you are looking for someone with exceptional communication skills, both written and verbal; time management skills; and organizational skills.
If you really want to create an accurate job description, have someone observe the person doing the role for a day or two. They will undoubtedly identify tasks that are not on the job description because so many of us, when we are expert at something, don’t even see it as a task! The incumbent might describe their role as “answering customer account questions,” but the observer sees using a database, reading and interpreting past queries to get up to speed quickly, being able to think critcially in order to “triage” questions as urgent or routine, etc.
Next, ask the incumbent, “Who else could do this if needed?”
If the answer is no one, you need to assign a co-worker to cross-train with the incumbent.
Early in my career I had a key role in a small company – I was the only one who knew how to do it; even my boss had no idea what I did. About two or three months into the job, I asked if I might have the sales secretary work with me two afternoons a week so that I could train her to do my job.
Honestly, I wasn’t doing it for the good of the company, I was doing it for me. What if I got sick, or wanted to go on vacation? I was trapped! And what if I got hit by a bus (which, no lie, our receptionist did, although in her case it was a dump truck, and she was out of work for eight months!)? Was my trainee perfect at the job? No. But she could have kept the wheels turning.
It's important to invest in developing successors now (preferably multiple successors [look what happened at JP Morgan Chase earlier this year]), while things are calm.
Succession planning is part human resources strategy, part professional development, and part peace-of-mind generator.
Succession planning is the insurance policy you need, to ensure that if one person leaves, the whole company doesn’t go down.
Need help in this area? Give us a call … even if you just want free advice! We are happy to give it .
Succession Planning is a Change Management Initiative
Most organizations know they need succession planning.
Few approach it as a change initiative.
Instead, they focus on identifying future leaders and making promotion decisions. But succession planning is really about ensuring the entire organization transitions smoothly and embraces the shift—whether that’s a CEO stepping down, a new department leader taking over, or key employees moving into more strategic roles.
People, in general, resist uncertainty. And ignoring the human side of change is why so many succession plans fail. If your employees don’t understand the process (or even know that you have a process!) or feel like they are in the dark regarding when and why transitions happen, productivity drops, morale takes a hit, and suddenly, what should have been a seamless leadership handoff turns into an organizational crisis.
Why Proactive Change Management Makes Succession Planning Work
Change is inevitable. How you manage it determines whether it’s an opportunity or a disruption. In succession planning, proactively managing change ensures that employees at all levels feel informed, prepared, and engaged in the process. Here’s how:
Start Communicating Early and Often Organizations make a huge mistake when they keep succession planning discussions behind closed doors. A lack of transparency breeds fear, gossip, and uncertainty. If employees don’t understand the company’s plan for the future, they’ll assume the worst—sometimes even leaving because that gives them a sense of control over their own career. Clear, consistent communication about succession planning eliminates speculation and builds confidence in the process.
Create Development Pathways Before You Need Them One of the biggest challenges in leadership transitions is employees feeling like changes are happening to them rather than for the good of the organization. Instead of waiting until a leadership vacancy appears, organizations should establish career pathways that develop employees into future leaders. This way, when transitions occur, they aren’t a shock—they’re the natural next step. Career paths also ensure that anyone can be a leader because they’ve been “primed” to know what they need to do, and what the timeline is, to achieve a leadership role.
Involve Employees in the Process Change isn’t something you impose—it’s something you guide. Employees should be active participants in succession planning. This means mentorship programs, cross-training, and leadership development opportunities should be woven into the company culture. My favorite maxim is: Succession planning should be standard operating procedure.
Address Emotional Resistance Change is just as much emotional as it is operational. Employees may worry about job security, new leadership styles, or how a new direction will affect them personally. Organizations that proactively acknowledge these concerns and provide support—through coaching, town hall meetings, and feedback channels—make transitions smoother.
Real Life Story
Here is an example of a company that did everything wrong; don’t be like them.
The numbers correspond to the numbers/best practices, above.
1. I started working with them at the beginning of July of 2024. I had three meetings in the course of a month, and, from the get-go, I said, “You need to tell people who I am and why I'm here. There's nothing nefarious happening in this conference room, but if you don't tell them, they're going to become nervous and think worst-case scenario. Maybe I’m from the IRS and you’re in big trouble. Maybe I’m a business broker and you’re getting ready to sell the company. They don’t know. The client refused to tell their employees who I was or why we were behind closed doors for hours at a time.
2. The current company executives “hand-picked” three new C-suite executives BUT when I asked who would replace these three when they moved up, I got blank stares. They could have planned a career path progression to mid-level manager roles and then into senior roles, but they had no plan for how they would replace the middle managers. That meant no one in the company was prepared to move up into the vacancies.
A vacancy at the senior-leader level or a middle-manager level is still an opportunity for chaos and a single point of failure.
3. The hand-picked future CEO had no preparation for the CEO role, in fact, during one of our early meetings he stood up, forcefully put his hands on the conference table, and said “I don’t know what a CEO does!” He had been with the company 20+ years, but they had done nothing to teach him how the business itself ran.
4. Before our third meeting a very key person had left the company to do the same job he was doing for the client, but for the state. I don’t know why he left, for sure, because I never spoke to him, but I DO know that:
a. He too was a 20+ year employee and perhaps he felt the hand-picked future CEO was a snub to him
b. Perhaps he saw the behind-closed-doors meetings we were having and it made him nervous about his job security – and he wanted to proactively control his options.
Additionally, I DO know that the company’s senior leaders were shocked and wounded that he had left. A large part of company revenue came from the division that he ran.
Do any of these situations sound like something that is going on in your company?
If so, please see my contact information at the bottom of this article!
Succession Planning Done Right = Change Management Done Right
At its core, succession planning is an exercise in change management. The best-laid plans will fail if the people affected by leadership transitions aren’t engaged, informed, and prepared. Organizations that treat succession as a structured, transparent, and people-centered process will set themselves up for long-term success—turning inevitable change into a strategic advantage.
This article was originally posted on LinkedIn.
The Difference Between ‘Good’ and ‘Purposeful’ Professional Development - and Why It Matters
First, a definition of professional development: the ongoing process of acquiring new skills and knowledge through education and training after entering the workforce, typically to advance your career.
Investing in professional development is a key strategy for any organization that wants to grow, innovate, and retain top talent. However, not all professional development is created equal. While good professional development can enhance an employee’s skills and knowledge in a general way, purposeful professional development takes a more strategic and individualized approach, ensuring that learning efforts directly benefit both the employee and the organization.
What is Good Professional Development?
At its core, good professional development refers to any training, learning opportunities, or skill-building initiatives offered to employees. This can include industry conferences, training courses, informational seminars, and certifications. The assumption is that by providing learning opportunities, employees will enhance their capabilities and in turn, contribute more effectively to the organization.
Most companies will offer a broad range of workshops on leadership, soft skills like communication, or technical skills like how to operate a forklift. While employees may gain valuable insights, the training doesn’t always align with their current role, future career path, or the company’s strategic objectives. While “good” professional development is certainly beneficial, it lacks intentionality and generally doesn’t maximize the return on investment for either the employer or the employee.
What is Purposeful Professional Development?
Purposeful professional development, on the other hand, is an intentional and strategic approach to employee growth. It goes beyond simply offering (what I like to call “random”) learning opportunities and instead focuses on identifying the best development opportunities for each individual based on their skills, potential, career aspirations, and the company’s plans for growth.
This type of professional development requires a deeper understanding of both the organization’s long-term goals and the employee’s strengths and ambitions. Instead of applying a one-size-fits-all approach, purposeful development ensures that employees receive targeted learning experiences that will directly enhance their effectiveness and potential within the company.
For example, let’s say you have a financial analyst in your organization. Instead of enrolling them in additional finance courses, your purposeful professional development approach might provide targeted training in company operations or real estate purchase and development—skills that align with the company’s future plans and the employee’s potential leadership trajectory. Similarly, if a customer service representative demonstrates strong communication skills, rather than keeping them in a CSR role, a better, more purposeful approach might be to invest in sales training to help them transition into a revenue-generating role.
Why Purposeful Professional Development is More Effective
While good professional development has its place, purposeful professional development is ultimately more effective because it:
⭐ Aligns Employee Growth with Business Goals – When professional development is tailored to each employee’s role and potential, the organization benefits from more skilled, engaged, and strategically prepared talent.
⭐ Increases Employee Engagement and Retention – Employees who feel that their development is taken seriously and aligned with their career goals are more likely to stay with the company and contribute at a higher level.
⭐ Maximizes ROI on Training Investments – Rather than spending money on broad-based learning, companies that focus on purposeful development ensure that every dollar spent on training has a direct impact on business success.
⭐Creates Stronger Internal Pipelines for Promotion – Purposeful development helps organizations cultivate leaders from within, reducing the need to hire externally and ensuring smoother transitions in key roles while simultaneously preserving the company culture and maintaining its values.
Ultimately, while good professional development provides value, purposeful professional development delivers real impact—both for the individual and the organization. Employers who take the time to be strategic about employee growth will see better engagement, stronger teams, and a more competitive business.
Introducing an easy and affordable way to provide purposeful professional development: PeerEXCEL.
The Training Doctor is a pioneer in utilizing peer learning groups for leadership development, professional relationship building, and career advancement.
The content and pace are co-created with you, to meet your needs and budget.
We start new groups three times a year: May, September, and January. If you'd like to learn more about how peer learning groups can work for your organization give us a call [number below] or grab this brochure.
Succession Planning & Exit Planning Are NOT Synonyms
This week I had a conversation with a marketing / SEO expert who told me he had "lots of experience with other pros like you." At first I thought, that's amazing! Because there aren't many people/companies who do what we do. So to work with a person who "gets it" would be awesome.
But almost immediately I realized... he doesn't get it. He went on to speak about business valuation and aiming our advertising at company owners who want to increase their valuation in order to sell their business.
He - like many others - has confused succession planning with exit planning.
This is not unusual; last year Law.com asked me to write an article for their audience (lawyers!) explaining the difference between the two. So don't be embarrassed if you thought the words were synonyms - because your attorney probably doesn't know either.
But now - let's clear up the confusion...
If you own a business or lead a team, you’ve probably heard the terms succession planning and exit planning tossed around. They both sound like ways to prepare for the future, but they’re actually pretty different. Here's our definition: succession planning is about making sure your business keeps running smoothly with a strong pipeline of future leaders in place, while exit planning is about figuring out how to step away from your business in the smartest way possible (legally, financially, timing-wise, etc.)
Here's more:
Succession Planning
Succession planning is all about building a strong bench of future leaders within your company. The idea is to develop and prepare people so that when the time comes, they’re ready to take on bigger roles.
This usually involves:
Spotting employees who have the skills (or can develop them) to step into leadership roles.
Providing training, experiences, job rotations, mentorship, and other growth opportunities so they’re ready when the time comes.
Creating a system for performance reviews and promotions so leadership changes don’t feel like a scramble (or a dagger to the heart).
The benefit?
You don’t end up in a crisis when a key leader leaves. Plus, investing in your employees this way helps with retention—people are engaged and productive when they know they know they are working towards a future with you.
Exit Planning
Exit planning, on the other hand, is about preparing for the day you step away from your business—whether that’s selling it, passing it down, or even closing it. This process helps you maximize your business’s value and ensure everything transitions smoothly.
A solid exit plan includes:
Choosing your exit strategy—selling, passing it on to family, merging with another company, or something else.
Sorting out the financials—things like business valuation, tax planning, and structuring a deal that makes sense.
Handling the legal side of things—contracts, agreements, and making sure everything is buttoned up for a clean transition.
Without an exit plan, you could end up scrambling at the last minute, leaving money on the table, or dealing with a messy transition. And no one wants that.
How Are They Different?
Even though they’re both about planning for the future, they focus on totally different things.
Chart of differences between business succession planning and exit planning.
Do You Need Both?
Yep! If you’re a business owner, it’s smart to think about both. Even if you’re not planning to exit anytime soon, having a strong leadership pipeline keeps your company stable. And when the day does come to step away, you’ll want a solid plan to make sure everything goes smoothly—for you and the business.
At the end of the day, succession planning keeps your business thriving, while exit planning helps you leave on the best terms possible. They can be done in tandem or individually. Having both in place is just good business.
Ten Truths About Succession Planning
In today's rapidly evolving business landscape, succession planning has become more critical than ever. As organizations face the challenges of an aging workforce and increasing competition for talent, understanding the fundamental truths about succession planning can make the difference between sustainable success and organizational crisis.
Truth #1: You're Already Behind Schedule
With "Peak Boomer" approaching in 2030, when the last of the Baby Boomer generation reaches retirement age, organizations face an unprecedented leadership transition. A 2024 Vistage survey revealed that 25% of CEOs plan to retire or sell their companies within the next five years. Creating an effective succession plan typically requires a decade of preparation, encompassing education, mentoring, knowledge transfer, and hands-on experience. If you haven't started planning yet, you're already playing catch-up.
Truth #2: Data Drives Decisions
Many organizations lack a clear understanding of their workforce demographics and tenure patterns. Without analyzing crucial HR data, companies may miss critical gaps in their leadership pipeline. For instance, an engineering firm discovered they had employees with either 20+ years of experience or less than eight years, with no mid-career professionals. This gap severely limited their succession options and career progression opportunities.
Truth #3: Employee Retention Hinges on Future Opportunities
Employees don't just leave bad bosses; they leave organizations where they can't envision a future. Without clear career paths and growth opportunities, top performers will seek advancement elsewhere. Transparency about future roles and development opportunities is essential for retention.
Truth #4: Succession Begins with Recruitment
Effective succession planning starts even before someone joins the organization. Companies must establish clear career paths showing potential progression over a career “lifespan.” Setting expectations early, including potential lateral or geographical moves, helps set expectations and align individual career goals with organizational needs.
Truth #5: Transparency Eliminates Favoritism
When succession planning is transparent, everyone understands the requirements and opportunities for leadership positions. Like Jack Welch's approach at GE, where potential successors were publicly known, transparent succession planning creates a fair system based on merit and achievement rather than secretive or personal relationships.
Truth #6: Succession Planning Is Strategic Planning
Organizations often mistake succession planning as a "nice-to-have" or future consideration. In truth, it's an integral part of strategic planning. Just as you wouldn't wait until the last minute to secure facilities for a new branch office, you shouldn't delay preparing future leaders.
Truth #7: It's Also Risk Management
Think of succession planning as insurance for business continuity. Having multiple potential successors for key positions protects against unexpected departures or emergencies. Ideally, each key leader should have at least three potential successors at various stages of development, ensuring continuous organizational stability.
Truth #8: External Hires Bring Risk
External hires, particularly at senior leadership levels, often have limited tenure – typically 18 months to three years in Fortune 500 companies. Outside hires bring their own methodologies and require significant time to learn company culture, values, and how to “get things done.” Internal promotions often prove more successful as these individuals already understand the organization's operations and culture.
Truth #9: Focus on Key Roles, Not Just C-Suite
Succession planning shouldn't be limited to top executives. Any position whose vacancy would significantly disrupt operations requires succession planning. This includes technical specialists, key salespeople, and operational managers whose roles are critical to daily business functions.
Truth #10: HR Facilitates But Doesn't Own Succession Planning
While HR plays a crucial role in facilitating succession planning, it shouldn't be solely responsible for this strategic initiative. Surprisingly, traditional HR education and certification programs don't include any kind of training in succession planning. Leadership must actively participate in developing and implementing succession strategies while working collaboratively with HR to execute the plan.
Successful succession planning (say that three times fast!) requires commitment, foresight, and systematic effort. Organizations that embrace these principles position themselves for sustainable growth and leadership continuity, while those that ignore them risk operational disruption and lost opportunities.
In today's dynamic business environment, effective succession planning isn't just about replacing leaders – it's about ensuring organizational resilience and continued success.
Ready to develop your future leaders? Don’t fall victim to these flawed approaches.
Developing strong leaders in-house isn’t just a nice-to-have—it’s a necessity for organizational success. Unfortunately I see too many companies wait too long and do too little, which hurts their ability to cultivate a healthy, sustainable organization.
Here are a few of the missteps I see repeated over and over – and what you should do instead.
🔘 We’ll wait and see if he/she is management material.
99% of companies that I observe promote somebody to a leadership role first and then retrofit the skills they need to lead others. In fact, according to leadership development firm Zenger Folkman, the average person is in a management role for 10 years before they receive any formal development in how to lead others. Developing leadership skills takes a lot longer than you think and waiting 10 years post-promotion does everyone a disservice not just the “new manager.” It’s like teaching a baby manners. You don’t wait until they’re ten years old and then say “Oh hey, you’re supposed to say thank you after somebody hands you something or fulfills a request you’ve made, OK?”
🔘 Not understanding the ROI of developing leaders from within.
Once I point this out to you you’re going to be shocked that you didn’t see it yourself. Do a back-of-the-napkin calculation of how much it costs your company to replace a leader with someone from outside the company. Not only are there the hard costs of recruiting or paying a headhunter, the time it takes to review resumes and conduct interviews, the negotiations with your chosen individual and the finance department to come to an agreement, and the loss in productivity while you have a vacant leadership position...
Next, add in the less obvious costs like the anxiety that might develop from being leaderless in the affected department and how folks might react - including looking for another job because they are nervous about what will happen next or who will replace the leader who is absent.
And the biggest cost of all is if you’re chosen individual ultimately doesn’t work out and you need to start the whole process over again. The loss of momentum and productivity in a leaderless department is incalculable.
You can avoid these costs by grooming future leaders from within because you will always have somebody at the ready to step up. They might not be 100% ready, but they definitely won’t leave the department with zero leaders. Think of how many supervisors or mid-level managers you have in your company and what it would cost to replace 10% of them a year because that is the average turnover at that level of authority in today’s companies (according to LinkedIn studies of various industries).
🔘 Not recognizing that our younger generations don’t want just a job – Career paths are the secret sauce.
Millennials and GenZ are changing the workforce. Not only because they make up the majority of individuals in the workforce (and that will continue to climb as more and more GenZers come of working age, but they also have a different viewpoint of how work supports their lives.
Earlier generations accepted that work came first and their personal life came next. (I remember interviewing for a job once in which I was told that every salaried individual worked 48 hours; it was a non-negotiable). Older generations also appreciated the fact that their work supported their personal lives and goals. Not so with Millennials and GenZ. These younger generations aren’t satisfied with a “job.” They’re looking for roles that fulfill their personal values and goals and they are looking to work for companies that will support them in achieving personal fulfillment.
This is not too hard for you to achieve; it’s really just a change in perspective. For example, one of the easiest things you can do is create career paths that show the general progression of one’s career with your company from their entry-level position to, potentially, the CEO role. Younger generations appreciate financial security and job security which your company was providing anyway, you just didn’t specifically call it out or emphasize the benefits of joining your company.
🔘 Going all in on a few individuals.
Another common approach I see occurring in companies that do devote time and attention to developing their leaders from within is that they pick and choose individuals rather than spreading the wealth and leveling up the skills of everyone in the organization. When I see this happening, I like to point out that Tom Brady was a ninth-round draft pick in 2000 and Johnny Manziel was a Heisman Trophy winner in 2013 and a first-round draft pick in 2014.
Then I ask folks to choose who they feel was the better investment. 🤔
It is impossible to determine who is going to make a great future leader. It is especially impossible to predict this based on their technical expertise. A better approach is to give everyone leadership skills and see how things shake out in a few years. Those who like leading others and excel at it will naturally rise to the top and you will have upleveled the competencies of all your employees in the meantime. (Who doesn’t want all of their employees to be better communicators or problem solvers? Why reserve those skills for a few individuals?) To add a financial angle to the argument – think of it like an insurance company insuring risk – many people are pooled together with the expectation that only a few will make a claim.
Invest in everyone and you’ll have a few who turn into stellar leaders.
Beyond Random Training: Creating a Strategic Path for Future Leaders
Eight years ago I made a hard right turn in my business. (Or maybe, based on the theme of this article, I should say I made a strategic turn.) I stopped providing leadership development and started saving companies from themselves. I know that sounds extreme but hear me out. The global investment in leadership development is over 300 billion with over half of that (169 billion) occurring in North America. And yet… despite this significant investment most organizations fail to get real, strategic advantage from their investment (source).
I’m not a person who thinks “Maybe if I try harder it will work;” instead I stand back and ask, “Why isn’t this working? and how can I change the outcome?”
After much analysis and reflection, it hit me: Most leadership development is done randomly - there’s no continuity between the learning content [in other words – a lot of random courses] AND there is no connection between what people learn and their on-the-job behavior.
Companies are doing leadership development without a strategy.
The answer to the question “How can I change the outcome?” is this: I need to help companies set their people strategy first.
Once you know who is in the pipeline for future leadership roles, then you are able to conduct development activities purposefully. You’ll reap better results and you’ll be spending your money wisely, not wastefully.
THREE STEPS TO BEGIN DEVELOPING YOUR STRATEGY
1) Update all of your job descriptions.
Have the incumbents take the first pass at this. They know what they do in reality. In addition to a list of “to-do’s” ask them to list all the skills they employ while doing their work. For example, a CSR would list listening skills, being able to verbalize and explain things well, writing skills (for the notes they put in the system), mastery of at least one and probably three different software systems, and more. I would allot 2 weeks to a month for this activity because responsibilities fluctuate from day to day and you want a complete picture of the role and skills. If you have more than one person in a role, you might bring them all together at the end of the process and have them compare and contrast their descriptions to create one that they all agree on.
2) Make a chain of job descriptions.
Start lining up your collected job descriptions in “order.” For instance, an entry-level clerk can go on to become a clerk supervisor a unit manager a division manager, and eventually a general manager. When you put these job descriptions end-to-end you’ll see the natural progression of skills and you’ll know what to start proactively teaching your up-and-coming leaders. For instance, a clerk might need to master a lot of factual information in order to answer the public’s questions, while a clerk supervisor or manager will need to be better skilled at emotional intelligence, listening and giving feedback, perhaps presentation skills, and more.
NOTE: You will have to extrapolate some skills from the job descriptions, for instance, dealing with angry customers will translate to conflict management, negotiation, or recognizing bias.
3) Develop career paths and learning paths.
Now that you have a path of career progress for each role, make it a formal document so that people see the future of their career with your company. AND “overlay” learning requirements on top of each role. For instance, now, instead of promoting someone to supervisor and hoping they have appropriate conversational skills, you’ll require them to have that training before they are promoted.
I promised three steps, so I’ll stop here, but the next level of strategy aligns with more purposeful performance reviews, coaching and/or mentoring, and analyzing job descriptions and skills for lateral movement which opens more possibilities for career advancement within the company and maximizes your leadership development return on investment.
If you’d like to learn more about these next levels of strategic people development, Contact Us!
Succession Planning Questions I Am Regularly Asked
For the past few weeks, I've been polling my personal followers and asking them questions about succession planning.
Then, the following day I give the answer.
This article is an abbreviated compilation of those polls and responses.
One of the top questions I get from clients is: When do you start preparing future leaders?
When someone is getting ready to move “up” or “out” is the typically the time when thoughts turn to succession planning. People start thinking, “Who should replace me?,” which is years too late.
The situation that we encounter a lot when companies call us with succession planning needs is that there is generally a key person who is ready to retire (or already did!) and there's no one in the organization to replace them. If you've got a chosen few that lead the organization and no one else in a leadership pipeline, I hate to tell you this, but you have a crisis situation.
Let's look at it this way: If you had a deadline to get married, say by age 40, but you waited until you were 39 to start dating - what is the likelihood of meeting your deadline? What are the chances that you'd choose someone who was not ideal just so you could make the deadline? Waiting too long begets rushed, decisions under pressure which are rarely the best, wouldn't you agree?
You don't want to have to simply “choose” someone - you want to “love” the person you've chosen.
Answer: The answer is on day one, ASAP, the minute they walk in the door. You want to constantly be preparing folks to move up in their careers so that your transitions occur in a planned, logical, purposeful manner.
Get everyone prepared to be a future leader. Those who enjoy it and excel at it will rise to leadership positions and those who don't enjoy it will, at the very least, be a lot more knowledgeable and able to contribute more to your organization. You can't go wrong if everybody has the ability to make good decisions, to communicate well, to collaborate with others, to be a problem solver, etc.
Another frequent question we get is: How should we pick future leaders?
In a workshop I recently conducted with small business owners, this topic came up organically in the group when one of the attendees said, “I would hire somebody for their leadership aptitude out of the gate. I can teach them to do the work. I would have had a hard time teaching them to be a leader.”
It's an interesting perspective, and I don't necessarily disagree with it, but... I will argue it for the sake of argument because our company philosophy is: Leadership From Day One. In keeping with that philosophy, I say: let's give everyone leadership skills and capabilities the minute they walk in the door. As soon as you hire them, they should be in a rotation of developing communication skills, problem-solving, critical thinking, working collaboratively, understanding finance or how the business makes money, how much money the business keeps, who your competitors are, the list goes on and on! If you start developing skills early in someone's career, I think more people are going to show leadership “aptitude.”
So, let's assume everyone has the aptitude and it’s up to us to grow it. And then from there we'll decide, or they will decide if they want to be a leader or not.
The final question for today is: When do you start communicating a leadership transition?
This is a question that comes up a lot because, for some reason, many organizations and their leaders think succession planning is a top-secret mission. But not communicating your transition plans makes people nervous for their futures.
You, as the CEO or the owner of the company, are planning your own future (retirement or exit), right? And you're planning for the future of the company - how you want it to continue to thrive when you are gone, yes? Well, directly or indirectly you're also planning your employees’ futures. I don't think enough C-Suite leaders recognize that people are watching you and wondering what's happening “up there” in the C-suite?
Here's a perfect example of what happens when you don't communicate your succession/transition plans:
This past year we began working with a five-person C-suite team to plan for the retirements of their CEO and COO. Starting at meeting number two, I kept suggesting that they needed to let their staff know why we were coming to their offices and going behind closed doors. I advised the team that the staff was probably becoming concerned and that what we were doing was not nefarious and didn't have to be covert.
I suggested a simple video message from the CEO or an e-mail that said, “Hey you probably have seen this team coming in regularly. We're planning for the future of the organization. We're planning for when we are ready to retire. What next leaders do you think should be in the pipeline, so that this company continues to be successful?” Unfortunately, they didn't heed our advice. The CEO said something along the lines of, “I know my people, they're not concerned.” And then, about three months into our work, one of their key division leaders left.
It was a gut punch, not only to the CEO, but to the operations of the company.
If you have a smaller company (under 1000 employees,) in which divisions are run by one key leader and you don't have any backup plans because you haven't started succession planning yet, you are not only vulnerable to losing a key person, you're vulnerable to affecting the company financially precisely because of losing a key person. If you treat succession planning like standard operating procedure, there's nothing to be nervous about because employees see, that from day one, you have planned for the ongoing success of the organization.
If you'd like to learn more about how to make succession planning standard operating procedure, drop a note in the comments and we can have a quick phone call or take a look at this blog post that talks about how to institute succession planning as an SOP.
Succession planning isn't just a task you turn your attention not when you’re ready to move up the ladder or retire (if you’re the leader of the company) —it should be an integral part of how your organization operates every day. Start early, communicate openly, and create a culture where leadership readiness is woven into the fabric of your business.
Cheers!
The Best Leaders Know "Who They Are"
I was recently chatting with a new acquaintance, and we were speaking of a mutual friend; my new acquaintance said, "He was so concrete-sequential."
I nearly leaped out of my chair! I said, "What? I'm concrete-sequential! I've never heard anyone ever say that before other than me!"
My husband, who was with us, asked "What does concrete sequential mean?"
It means - in my case - once I have a plan, I stick to the plan. It must be carried out in the order it was designed. For the most part, this works well for me because I like to make lists and check things off my list (in fact, I just made a list of the 5 things I have to get done today, before EOD, and writing this article was #1, so here I am!). People have always asked me, "How do you manage to get so much done?" It's the plan, man.
It also can work "against" me in that once I have a plan I stick to the plan. (Isn't that what I just said in the previous paragraph? Yup.) For example, if I am behind schedule and it would make sense to revisit the plan - I don't. I just work harder and longer. If 8-hour days won't get us back on track, then I'll work 12-hour days, but I won't consider if I might outsource, or possibly skip (heaving forbid!) a step because it's really not crucial.... nope. The plan is the plan.
I have known I was concrete sequential since I was in college and took a course centered around assessments. Every week we took a new assessment and the following week we got our results and processed what that meant for us as a person, as a team member, as a leader, etc. The assessment I took that taught me I was concrete-sequential is called the Grecoric Style Delineator.
So what is the point of this ⬆️ story?
The point is: Knowing who you are and how you operate can help you to be a better leader. Assessments can help to define learning styles, personality traits, leadership potential, and more. You'll find abilities you can capitalize on and detriments you can learn to overcome because you recognize when they are in play.
There are many "name-brand" assessments that can be purchased and often require a certified practitioner to help process what the outcomes mean and how to use that knowledge to your best advantage (DiSC, MBTI, Predictive Index, etc.). I'm not knocking any of them - they truly are all great - BUT here are three that are free so you can get started today.
You can use them for your own self-enlightenment or use them with your team to create a better understanding of individual and team dynamics.
By the way, just because these are free does not mean they have not been carefully researched and validated.
Enjoy!
Via Character Strengths Assessment Link
This assessment helps you to identify your strengths so that you can capitalize on them; do you work well in teams, do you prefer to make decisions based on facts, etc.
A unique feature is Viana, an AI chat-based "coach" that helps you "blaze a trail towards personal and professional growth."
The LeadX EQ Self Assessment Link
EQ is also known as emotional intelligence and it has become a critical skill for leaders in the workplace due to younger generations entering the workforce and their appreciation for different ways of being recognized and valued.
The report you receive upon completion offers a handful of ways to enhance your EQ, based on your results and you can delve deeper with a 12-week EQ coaching plan.
Sparketype Link
This assessment is based on the "intangibles" that make a person "come alive." The premise is to help you align your spark with the work that would ignite it - regardless of job title, industry, or company. There is also an accompanying book that delves into the 50 million data points collected from the more than one million people who have taken the assessment.
After you take any (or all) of the assessment, we'd love to hear your results and how they affect your leadership!
This article was originally posted on LinkedIn.
Changing Direction For YOU!
The Training Doctor has been in business for over 30 years but only in the last eight years did we significantly blow the business up and change direction. Why? For You!
Several societal events converged to make us change direction. Think of them as the perfect storm.
First, in 2015 the US census said that all the Boomers would be out of the workplace by 2030. Having consulted within professional development departments for many Fortune 500 companies in the prior 25 years, and knowing how little had been done to prepare younger generations for leadership roles, and knowing how long it takes to develop a leader... I immediately began to worry.
Next, I realized that we (here at the company) were part of the problem. For the first 25 years of our existence, we custom-designed training programs for companies and handed them back for implementation. The design work that we did was always for a job or role. We never built a well-rounded business person.
So, the confluence of younger people being promoted to roles for which they were unprepared, combined with their lack of years on the job (as opposed to Boomers who generally stayed with an employer for decades), was concerning.
The question keeping me up at night:
Who will be capable of running companies in 10 years if they don’t know how a company runs?
And then...the pandemic hit, and my worries came to fruition overnight.
❓ So why did we stop helping companies with their training and development?
❓ Didn’t I just say that preparing the younger generation was a huge motivator?
Yes.
BUT
Developing the skills of younger people is not enough.
Companies need to know why they are developing their younger generation and they need to know they are developing the right skills.
And that’s why we changed direction.
There are very few companies (if any—honestly, we haven’t found a competitor yet) that help you figure out this critical element. ⬇️
Before you start developing your up-and-coming leaders – you need a succession plan to ensure that you know who you are developing and for which roles.
You also need to assess your likely vacancies in the next few years and ensure you don’t go out of business because one critical role becomes vacant.
We changed direction because we are on a mission.
Our mission is to help small and medium-sized businesses to not go out of business because they didn’t look—and plan—far enough ahead.
If you’d like us to help you with YOUR mission – Let’s Talk!