According to Price Waterhouse Coopers (PWC), prior to Covid, almost 1.5 million business owners were due to retire in the next decade. And whilst some of those will be looking to sell their business, many will want to hand the reins of that business over to a new leader.
As research from the 2009 GFC bore out, crises tend to accelerate change at the top – people can burn out, get sick, pull retirement forward or the crisis highlights to the board issues that might have remained otherwise hidden.
However navigating your way through and out the other side of a crisis, is very different from running a mature, largely steady ship or managing an early start up. The leadership skill set that might have worked prior to the pandemic, might not work any longer.
But is being in the midst of a crisis the right time to plunge the business into such a dramatic change as changing leaders or is it better to wait for the crisis to pass? Well, as with many things, it depends on;
- the circumstances you find yourself in
- how prepared the business’ succession planning (and its likely leadership successor) are and
- the timings you’re working with.
If, however, you find you and/or your business in or heading towards dire straits as a result of the pandemic, maybe it might be time to consider some help. Although it’s usually better for an existing CEO to guide a business in time of crisis, it might not be the most appropriate way forward for your business.
So what are the options for succession planning when in crisis?
- You might consider either utilising the competencies of someone senior already in the business (who most likely would have been your succession pick anyway if you had one) to calm stressed employees and get them through an already difficult time . Think of it as a leadership transition phase – the two of you working together – you to ease them in, them to ease you out, if not completely, then into more of a chairperson role. That way when the transition is complete, the business continues on seamlessly.
- Or, if you’ve no obvious successor internally or you hadn’t even started thinking about what your succession planning might look like, you could bring in an external consultant. They’d need to have significant crisis experience and be someone who’ll work with you for a fixed period, to allow things to run largely ‘as usual’, just with an extra hand guiding it until you can get your business back to regular programming and your succession planning to the next step.
- Or, if you need to move on quickly for personal reasons, and want to retain ownership of your business, but have it run without you, you might consider appointing an external successor. Appointing the right person as quickly as possible, will allow your successor to gain maximum credibility as they navigate the current crisis and lead the team.
Whichever option you choose though, make sure your successor isn’t left holding the bag. As much as possible prepare both your successor (or consultant) for their transition in/up and the rest of your team for your successor. Get things as ready as you can and make sure that your team is as bedded down as possible. There’s nothing worse than a new leader being distracted from the main game by disgruntled passed-over team members disengaging.
A word of warning to the wise though – if you’d already ‘found’ your person (internal or external) prior to Covid, just double check that their skill set is enough to get the business through and well out the other side of what might be a rough couple of years. Coronavirus is likely to change the operational landscape for quite some time and the leadership capabilities that are required to manage the ‘new normal’ might be entirely different from what might have been required prior.
Of course all of these choices requires operating from a base of having nutted out your succession planning from a tax, IP, market value and agreement perspective. As with almost all things the best time to have done that was well before you needed it. Failing that though, doing it now. And that’s where we can help. If you want to chat with someone about safeguarding your legacy (and your future!) and minimising your tax now and into the future, we’d love to help. You can call us on 02 6023 1700 or drop us a note via the form below.
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