“76% of Canada’s business owners plan to exit their business within the next decade. Only 1 in 10 owners have a formal plan in place to ensure a smooth transition.” – Canadian Federation of Independent Business
When a company undergoes a leadership transition, it can be a time of uncertainty and disruption. Whether it’s a planned succession or a sudden change, the departure of a CEO or other key leaders can leave a void that needs to be filled quickly and effectively. This presents a significant challenge for those who are looking to transition smoothly and ensure their company’s continued success.
When working with clients, we often find five critical areas that are often overlooked but need to be considered during a leadership transition.
- Stakeholder consultation: Stakeholders, including clients, employees, advisors, suppliers, etc., have a vested interest in the business’s success and play an important role in its future. Identifying and engaging with these stakeholders in an unbiased manner, often by bringing in a third-party advisor to facilitate conversations, is an essential aspect of any successful leadership transition. By involving key audiences in the transition process to understand market perceptions and concerns, owners can build trust and confidence in the company’s direction and ensure that everyone is working together to achieve common goals.
- Strategic planning: A leadership transition can be an opportunity for a company to reassess its strategic direction and goals and, often, incoming leadership wants to set a new course they crafted and can own. An advisor can help the company identify its strengths and weaknesses, assess the competitive landscape, and hone in on the right priorities. This typically includes making hard strategic choices about where to place organizational focus amidst competing opportunities, and will ensure that the company’s culture, values, and vision are aligned with its goals.
- Communications and change management: A leadership transition is a disruptive time for employees, clients, and partners, necessitating a communication strategy that keeps stakeholders informed and engaged. New and existing owners need to work together to share a common narrative around the leadership transition, keep stakeholders informed about the transition’s progress and the company’s future, and articulate potential changes and their impact. A strong communication plan includes regular updates, feedback mechanisms, and strategies for addressing concerns, questions, and potential risks. Executed correctly, this plan will minimize uncertainty and anxiety among stakeholders and ensure that everyone is on the same page.
- Future market positioning: A key driver for a transition’s long-term success. After completing formal strategic planning, business owners then need to consider the company’s value proposition, ideal audiences, and gaps between the desired future state and current client experience, developing a plan that capitalizes on the former and addresses the latter. Ensure there is clarity around if a transition will impact a company’s ability to compete and win and how the new strategic plan ties to a relevant go-to-market strategy and execution roadmap.
- Post-deal integration: If the leadership transition is the result of a merger or acquisition, an M&A integration advisor can help the company with a formal integration process. This often includes developing a change management plan that accounts for integrating the culture of the two companies and making branding decisions while managing operational and HR decisions.
A leadership transition can be a challenging and complex process, but it can also be an opportunity for growth and renewal. Often, time and resources are allocated to identifying and training successors, with limited time and resources allocated to planning for the process of transition and the desired future state. By formally preparing for the transition, business owners can ensure that they are engaging with key stakeholders, identifying growth opportunities, proactively mitigating risks, communicating effectively, and positioning the company for future success. With the right support and guidance, a leadership transition can be a positive experience for everyone involved.
“Through unbiased, third-party stakeholder conversations we received clear feedback and direction to focus our business through, and after transition. The work with Incite solidified what is truly our core business, aligned expectations moving forward, and provided valuable information around improvement areas to manage during transition. In the year and half since our engagement with Incite, results from both client satisfaction as well as project execution have been very positive.”
– Rob Nespliak, President, ICON Industrial Contractors
