One Business Owner's 10-Year Succession Journey

Michael Sipple, Sr., CEO/Chairman, Centennial, Inc.

Senior executives pour their lives into the success of their organizations.  It’s so much a part of their identity that they sometimes cannot imagine life without it. The challenges. The goals. The new pursuits.  However, retirement sounds pretty sweet too.

Can these two streams of thought coexist: 1) pressing forward in business and 2) retirement? Can your desire to lead your organization to ongoing success seamlessly marry with your desire to retire some day?  Today is the day to consider this.

I’m a Succession Veteran

I am Mike Sipple Sr., the former President of Centennial, a Cincinnati-based Talent Strategist and Executive Search Firm. I stepped down from my presidential role two years ago when I passed the mantle of day-to-day leadership to my son, Mike Sipple Jr.  In my current role as CEO and Chairman I appreciate all that transpired to get me here.  What I share below is part of my succession story; the ups, the downs and the in-betweens.

Where I stand today, on the back-end of the process, I have the coveted hindsight vision of 20/20.  I hope what I share here provides you with the foresight to plan for the future of your organization.

My First Thought of Succession

I was 57 when I was first asked about my plan for succession.  The question was asked, “What happens if you die tomorrow?”  My blank face gave away my thoughts on the matter.  Succession?  The idea had never crossed my mind.  My thought of retirement was so far in the future that there was no need to dedicate any time to it – or so I thought.

The irony of it all was the fact that I had helped numerous leaders with their succession plan, but I had never, once, considered my own.  Just as I had helped others, I was coached to get outside assistance with my own succession plan. That was ten years ago.

The Priceless Treasure of Outside Advisors

The benefit of having outside advisors walk through the succession process was absolutely invaluable to me.  We chose the Goering Center’s Next Generation Institute to walk us through this process.  I can honestly say we would not be in the good standing we are today if we had not enlisted their help. Outside advisors provide at least four key benefits:

  • Make you think
  • Offer unbiased and biased feedback
  • Provide a wealth of knowledge and experience
  • Facilitate and sometimes mediate between varying expectations

Outside Advisors Make You Think

Before you take any overt action, you need to do a lot of thinking and reflecting.  Outside advisors can help you think through your vision and expectations so that you can more wisely consider what you need in a successor. This step is often skimmed over.

I recommend setting aside several, uninterrupted hours to think through and write out some key points.  Here is an outline I suggest following:

  1. Reflect on the goals you had when you started and how they were fulfilled.  I find this step very rewarding and encouraging.
  2. Write down your vision for the organization. There may be a formal vision already in place but consider what direction you’d like the organization to go in the future.
    This will help you find a successor that shares much the same vision. Your vision may fill several pages or just a few bullet points.  Think of it in 3 categories: Start, Stop and Continue.  What new things do you want your organization to start, what needs to stop and what should continue?
  3. Consider your legacy.  What do you want to leave behind for the next generation?  Whatever you determine may help add clarity to your vision.
  4. Write down what you don’t want your company to become.  If you have strong feelings about specific areas, make note of it.  Again, you’ll want to communicate these when looking for someone to take on future ownership and leadership.

All of this contemplating will take time, maybe more time than you think you can afford.  However, the challenges you set aside to dedicate time for reflection will be there when you’re done.  And in the end your organization will be better because of it.

Outside Advisors Offer Biased and Unbiased Feedback

Outside advisors can provide the amazing benefit of being unbiased.  Succession can be an emotional process. You are handing over your “baby” to someone who has different ideas and perhaps less experience.  It can be stressful!  An impartial participant brings invaluable level-headedness.

An advisor is able to look at your situation objectively.  They’re not dazzled by your past accomplishments or overwhelmed by all you want your organization to achieve in the future.  They can listen to your thoughts, look at your plan and point out what you may be missing.

I have said more than once, “I don’t like what I’m hearing, but thank you.  I would have been headed in the wrong direction.”  Wise, seasoned advisors know what they are talking about.  Listen to them.

Outside Advisors Provide a Wealth of Knowledge

Many outside advisors have worked through successions before.  They recognize the normal obstacles – and there will be obstacles.  They can also recognize serious problem areas and blind spots that need to be addressed.

Outside advisors know what questions to ask.  This allows you and your potential successor to discuss topics before they become a source of contention.  There are so many variables that need to be looked at and considered.  Advisors have the experience to know what those topics are so they can be worked through systematically.

If the advisors see too much misalignment, they can wave a yellow or red flag.  If the chosen successor is not going to be a good fit, it’s important to discover that early and find a better fit as soon as possible.

Outside Advisors Mediate Between Varying Expectations

The incumbent and the successor are two unique individuals.  That’s great, but it also means there are varying expectations.  No matter how close of a relationship you have with your successor, he or she will have many preferences that may not match yours. We are not looking for a clone…we are looking for a leader who can carry on the vision and values of the enterprise, and continue to make the business even more healthy and successful in the future. Outside advisors can be the facilitator that guides the two of you through these areas.

It’s critical that you find out the expectations of both individuals and discuss the reality of them.  It’s not uncommon for each person to know what they want and not even realize the chasm of differences.  A facilitator can help by restating what is being said. “This is what I’m hearing from the incumbent and this is what I’m hearing from the successor.”  Until the outside advisor states this plainly, the misalignment may not be seen.

I liken succession to a marriage.  When you get married, you bring two sets of ideals together and strive to blend them into one.  Each person needs to give a little, or sometimes a lot, to see the marriage succeed.  And similarly, sometimes outside help is valuable to sort through some of the obstacles.  For the sake of the marriage, or an organization, outside help is a worthwhile investment.

The Lengthy Process of Planning for the Future

Shaping the future is exciting but it takes time – lots of time.  We were told by The Goering Center’s Next Generation Institute to expect the succession process to take 7-10+ years if we really wanted it to go smoothly.  I was dumbfounded at how long that sounded.  Now, 10 years later, I understand.

The succession process has 3 big steps, with a lot of steps in between:

  1. Choosing a Successor
  2. Preparing a Successor
  3. The Hand Off

1. Choosing a Successor

There are many traits to look for in a successor but I feel some traits are more critical than others. Most importantly, the successor needs to be committed to the business.  Are they willing to take on the responsibility of the organization and all the benefits, challenges and hassles that comes with it?  They can’t look at the position as an ego boost.  It’s a huge commitment.

The successor also needs to be teachable, competent and adaptable.  They need to have proven leadership abilities, and a large part of that is being teachable.  The successor will need to learn a lot as they assume their new leadership role.  They need to be open to learning and adapting.

It’s also important that the successor shares your same values.  Be sure you are handing off your organization to someone who will continue to promote those values.

2. Training a Successor

Once you’ve identified your successor and he or she has agreed, it’s time to start training and coaching.  You will want to thoroughly develop him or her in the areas of development they need the most.  You want to set them up for success, so it’s critical that they are well prepared.

Connect your successor with outside sources that can mentor them.  You want them to be well versed in all aspects of the business: operations, business development, finance, culture, etc. This may require the successor to step outside his or her comfort zone and learn things that do not naturally appeal to them.

3.The Hand-Off

At this point it’s time for the incumbent to release control.  Know in advance that this is challenging. It’s hard to turn over the reins.  Not every decision the new leader makes is the same one you would make.  Some decisions may even have poor results.  Allow the new leader to make mistakes and learn from them…just as you did.

Your successor may want to rush this final step.  He or she is eager to assume control and show what he or she has to offer.  There are many layers to the learning process and it’s essential that the total power doesn’t shift until the successor is truly ready.

Support the Successor

When the candidate is vetted and chosen, it’s critical that the message is clearly and positively conveyed to the organization. This is another choice that may not be met with 100 percent enthusiasm.  Not everyone will agree with your choice.  Your loyalty and support of the successor should never waver.

Your public support will help the hand-off to be smooth.  Any doubt you convey will only cause dissension. Any doubts or concerns should be handled one-on-one with your successor or with the two of you and a trusted outside advisor - in private.

Start Making Succession Plans Today

Each organization and succession plan will look a little different. However, the key to making it successful is investing plenty of time to plan for it and execute it.

If you start making plans two years before you hope to leave, you have probably started too late.  A short timeline creates stress and may cause you to make unwise decisions because you’re in a rush.  A wise leader will take action before it’s too late.  Start today to begin making plans for succession.

I truly love helping other business owners and key leaders succeed in their businesses, careers and personal lives. I have experienced the richness and wisdom of having other leaders speak into my life and I love doing the same for others. I am thankful for the Goering Center and the trusted advisors who have come alongside of me and my successor, my son.  They have helped us make our succession transition successful and the process fun, though challenging, and well worth the investment.