Posted by Robert Half Management Resources on Thursday, October 2, 2014 - 00:00 | Follow me
You may have heard the news: Oracle CEO Larry Ellison recently stepped down after 37 years in the head post. His new role is as CTO and executive chairman of the company. By all accounts, the transition has been smooth, and, other than new titles for Ellison and a couple of other executives, it seems to be business as usual at Oracle.
But not every organization has succession planning as well-mapped as Oracle. According to a Robert Half Management Resources survey, 78 percent of CFOs haven’t identified a successor for their position. If no plans are in place, an executive transition or retirement announcement can spark power struggles, confusion, a dip in productivity and morale, turnover, and a host of other problems.
Here’s how you can follow Ellison’s lead and plan for an executive transition that causes as little disruption as possible:
Start succession planning now
Rather than trigger a crisis of leadership within your organization, the vacancy of a key position should set in motion the advancement of up-and-coming leaders. Succession planning does not have to be formal. But it does have to be coordinated. Start by identifying jobs within the organization that are too important to remain vacant, even for a short period, and then select individuals who have the technical skills and interpersonal abilities to assume those roles with the proper leadership training and development.
The earlier you start succession planning, the better. You’ll want to allow enough time for succession candidates to take on new work assignments, develop relationships with key managers throughout the organization and receive coaching from established leaders.
Ideally, you’ll identify multiple candidates for each role to account for all the unknowns between now and when the position in question opens. This is similar to the approach Oracle took: After Ellison stepped down, two executives — Mark Hurd and Safra Catz — were promoted to co-CEO.
Set a plan for the transition
One of the biggest risks when an executive steps aside or leaves is that his or her institutional knowledge will leave as well. Doing your best to prevent this from happening is an essential component of succession planning.
One way to do so is to invite departing executives to remain involved with the company after stepping down. With Oracle, Ellison is taking on a different role, allowing the company to retain his skills and expertise. Other successful companies have approached succession planning in a similar way and carved out new roles for their former leaders. Consider Microsoft. Founder Bill Gates transitioned from chairman and CEO to his current position as technology adviser over a period of 14 years. Gates last worked full time for Microsoft in 2008 yet remains closely tied to the company even today.
Former executives can serve as a mentor or adviser to their successor. Or they can serve as a consultant. In fact, consulting is an ideal way to transition from full-time work to retirement. The benefits here are twofold: The company can tap the executive’s knowledge, and the consultant can stay connected to the workforce while having greater control over his or her schedule.
The good news is that professionals in large numbers are exploring consulting as a bridge to retirement. Seventy-five percent of financial executives interviewed by Robert Half Management Resources said they find the prospect of consulting somewhat or very attractive.
Is succession planning a priority in your workplace? Is consulting an option for executives nearing retirement at your organization? Let us know in the comments section below.
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