Lindsey M. Bessy, ALMI, CLTC, MBA, CLU, CASL- Financial Advisor
We recently talked with a client who was facing a more common problem with succession planning than one may think.
The current President of the Bank was 5-10 years out from retirement. The board had discussions on the next generation of leadership and ultimately selected a successor.
Nobody ever told the potential successor.
Meanwhile, an unsolicited offer from a competing bank made its way to the individual offering him more compensation, benefits and deferred compensation. This individual assumed that he would be the successor of the current president, but was not certain since this was never formally communicated to him, and a benefit plan was never put in place to retain him. Upon announcing his intent to leave for the competitor, his current employer tried to keep him on by increasing his salary and offering a long-term benefit plan (i.e. Deferred Compensation).
The individual became further frustrated when told about the unknown succession plan. Knowing with certainty that he had potential for growth may have prevented him from even entertaining another offer. Furthermore, he interpreted the lack of communication about the succession plan as a lack of respect, as if his employment was taken for granted and that his employer felt there was no real risk of losing him.
It was too late – the reactive measures of the existing employer felt hollow in comparison to the proactive measures the competing bank was willing to take to show him they valued his talent and truly could see his potential.
This happens all the time within the business world. Management identifies talent and develops a plan for succession, but omits to keep one of the most important stakeholders in the know. Perhaps there is concern that the hand-picked successor may not want the position, or he or she may then take their ascension for granted and perform at a lower level. Even if they do agree with the succession plan, there is still the risk they may leave at some point anyways.
Most of this can be mitigated by open and transparent communication. Talking to the employee about how his or her plans for the future and confirming he or she is still on board fosters much better results than hoping that they may stay without any communication along the way. After all, hope is not a strategy.
The best way for your employees to find out you value them and want to see them grow within an organization is to tell them. Make it clear that they have a place to grow and challenge them along the way while training them for their move. Knowing that there is an active and healthy succession plan will motivate the employees who want to be a part of it. This will especially resonate well with Millennials. Communicating your plans to give them increased responsibility will make them feel appreciated. Communicating openly shows employees that the organization practices transparency, which is something valued greatly by the next generation of leaders.