Ultimate Guide to Executive Succession Planning

Executive succession planning is a bit of a buzzword in the upper tiers of most company hierarchies.
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Executive succession planning is a bit of a buzzword in the upper tiers of most company hierarchies. But what is it? And how can you make sure that your company does it right?

In this ultimate guide, you’ll see a talent risk perspective on executive succession planning and how to do it effectively. 


What is Executive Succession Planning? (H2)

Executive succession planning is preparing for the eventual departure of acritical executives, either through retirement, promotion, or some other exit. 

This planning is typically done on a regular cadence so that companies can mitigate the risk of losing a critical executive. It’s also done to create continuity and identify up-and-comers that the company can groom, train, and perhaps find rotational opportunities for. 

In short, executive succession planning is all about making sure that the next generation of company leaders is ready to take over when needed. 


Traditional Executive Succession Strategies vs. The Steve Trautman Process (H2)

Succession planning is a problem that companies and corporations have spent decades trying to solve. When done right, it results in a seamless transition of power from one executive to another, but when done incorrectly, it can cause service disruptions, loss of profitably, and even stock dips. 

To understand why executive succession planning is so hard, we first need to look at some of the traditional strategies that companies have been using to navigate their executive transitions.

Traditional succession strategies often include practices like the 9-box model, nominating successors based solely on titles, and the short-list method. (More on these below)

The fundamental problem with most traditional strategies is that they tend to follow shallow, body-for-body succession practices. 

For example, John Smith is leaving the company. Maria has a similar job title and personality to John. Therefore, Maria will make a good successor. This kind of succession strategy fails to take into consideration all the hats that John Smith wears and has accumulated during his time with the company — setting Maria up for failure. 

Here at The Steve Trautman Co., we’ve developed a more robust executive succession process that resolves the problems found in traditional methods. But before I share how we do things differently, let’s explore a couple more traditional models and identify their flaws.

The 9-Box Succession Planning Model (H3)

The 9-box model is a popular succession planning matrix. The 9-box is a 3×3 grid, with different qualities listed in each of the 9 sections. For example, the upper trajectory of the 9-box might include “business skills,” while the Y axis might list “interpersonal & leadership skills.”

When it’s time to nominate a departing executive’s successor, a company’s leadership team will sit down and plot possible successors on the 9-box. Those who make it to the top right of the matrix are usually the ones selected for the position. 

Now, there’s nothing wrong with doing a 9-box to help estimate which candidates would make better successors. But the problem with basing your final decision on this method is that the 9-box is based largely on subjective opinions about candidates, not hard facts about the job at hand.

Sure, Bob Maria may have “business skills” but are these the same kind of business skills that John Smith uses for his job? The 9-box method fails to provide your company with this kind of vital information. 

The Short List Succession Method (H3)

Another traditional method is the “short list.” This is when an executive maintains a list of the people they consider possible successors either from within the company or from another organization. Should the executive depart, a name from their short list is called forth to take the exec’s place. Either from within the company or from another organization

In theory, short lists sound like an effective way to get succession planning done. The reality though is another thing altogether.

This is because companies have many executives, but only a finite pool of talent to draw on when it comes to choosing their successors. So what commonly happens is that many executives have the same name written at the top of their short lists! 

This poses a serious talent risk, because if someone on the list exits the company, then some of the executives have suddenly lost the person they each considered their own successor. Another obvious problem occurs when an executive retires, and someone from their list steps in to take their place. Now the rest of the executives who also had that name must now scramble to come up with another possible successor. 

How We do Succession Planning the Right Way (H3)

The Steve Trautman Co. is uniquely qualified to provide a solution to the executive succession planning problem. 

Knowledge transfer and executive succession is our bread and butter. And our team of knowledge transfer experts has spent decades helping some of America’s largest companies carry out seamless successions. 

These years of experience have given us the ability to accurately identify flaws in traditional methods and the skills needed to develop a new executive succession process that resolves those problems. 

Our succession planning process is based on identifying the exact work that an executive does and the skills they use. We then enter this data into a matrix where it is deconstructed into silos of related work and skills. 

By doing this, our succession process offers your company a better, more data-driven solution. Because we think about executive succession planning in terms of the work that needs to be done, not simply the job title and personality. 


The Industry-Leading Tools We Use to Make Succession Planning Easy (H2)

One of the unique advantages of partnering with The Steve Trautman Co. is that you will gain access to a suite of tools that we have spent over 25 years fine tuning for executive succession planning. 

These industry-leading tools include:

  • Knowledge Silo Matrix: a data-driven framework that deconstructs your executive’s expertise and knowledge. These are then sorted into genres of work (i.e. silos) and this helps us identify which successor candidate should be chosen and how many successors are needed.
  • Skill Development Plans: this breaks down the expert’s tacit knowledge and other skills into tangible actions that can be taught and learned in one hour. 
  • Knowledge Transfer Sessions teaches your executive how to effectively transfer their knowledge to successors.
  • Knowledge Transfer Test Questions: measures knowledge transfer progress and confirms that successors have the ability to independently perform executive tasks. 


What The Steve Trautman Process Looks Like In Action: a Case Study (H2)

To help you understand the advantages of our executive succession planning process, let’s look at a real-world example. 

This is a quick case study of how Steve Trautman Co. helped a large international corporation retire one of its executives without any disruption or lapse in profitability. 

A Problem With Big Consequences (H3)

Recently, a company approached us about a problem they were facing. 

This company was based in Japan but had branches in the United States, where one of the leading executives of their USA division was seeking to retire. The leadership in Japan was very concerned about this executive’s retirement. He had been with the company for decades and his distinctive personality and wide range of skills played a critical role in the success of the USA division. 

The executive had been wanting to retire for years, but every time his turn came to exit, he’d get a call from Japan asking him to stay — which he did. But this time, he was really serious about leaving. He was feeling older, had grandkids to tend to, and was ready to move on to the next stage of life. 

Now, the Japanese leadership was faced with the daunting task of appointing a successor for the retiring executive. 

When this company approached Steve Trautman, they already had a successor in mind but were worried that he may have trouble filling the shoes of the departing executive. They wanted our team of executive succession experts to ensure that their replacement was a good fit for the job.

How Our Executive Succession Strategy Set the Stage for Success (H3)

The first thing we did was come in and deconstruct the work that the executive did. We did this by interviewing him and speaking with other members of his team. 

Then, we entered this data into our Knowledge Silo Matrix (KSM), dividing the work he did into blocks— identifying the specific tasks he completed each day and what areas of the company he was involved in. 

What we discovered was that this executive’s work included everything from product design to major contract sales, managing inventory to marketing responsibilities. And when he wasn’t busy doing that, he even worked on some of the financials for new products. 

Because this man had been at the company for so long, he had slowly accumulated over a dozen roles. For example, whenever he had been promoted, many of his old tasks simply followed him to his new position. Consequently, he had a massive range of work responsibilities — to the extent that even his own company wasn’t aware of how much he was responsible for. 

Unsurprisingly, there was quite a large disparity between the departing executive’s work responsibilities and skills and those of the company’s appointed successor. If the up-and-comer was expected to step into the entire role of departing executive, then he would absolutely fail. 

How The Steve Trautman Process Resolved The Problem (H3)

By deconstructing the executive’s work and dividing it into seven silos, we were able to mitigate this problem in the following way:

The company’s appointed successor would take on the executive’s title and step into two of the seven work silos. 

As for the remaining five silos, we gave the company two options. 

Either they could give the successor a support team to manage those silos for him, or the company could split those 5 silos off of the job’s role and hand them over to qualified staff. 

By following our specialized succession process, this high-stakes company was able to seamlessly retire the executive and replace him with an efficient set of successors.


Reactive vs. Proactive Succession Planning (H2)

The previous case study is a good example of executive succession planning in less-than-ideal conditions. This is because our work with that Japanese company was done in a reactive way (i.e. the executive was actively trying to retire and we were reacting to that).

Ideally, succession planning should be done proactively (i.e. before the executive is wanting to retire). 

Proactive planning is better because it ensures that your company is prepared and won’t be negatively affected if a top-level executive suddenly decides to exit. 

What is the Difference Between Reactive and Proactive Succession Planning? (H3)

The primary advantage of proactive planning is that it gives you time!

Time to accurately deconstruct the executive’s work, time to groom successors, and time to carry out effective knowledge transfer between the exec and their successors. 

It also enables you to prepare successors far in advance of your executive’s departure. So rather than scrambling last minute to find a replacement, you instead have a whole cadre of up-and-comers who have spent the last five years preparing to take over the executive’s role. 

In contrast to this, reactive planning gives you little time to select and train successors — increasing the possibility of failure if not done properly. 

Proactive executive succession planning ensures that when the time comes to actually promote somebody, you won’t be dependent on an emergency shortlist of “who’s next?” but can rely on your network of prepared and capable successors. 

Executive Succession Planning Done Wrong (H3)

In contrast to the successful case study shared above, here is a great example of what happens when reactive succession planning is done the wrong way. 


The Ultimate Method of Executive Succession Planning

Let’s end this blog post with a quick review of The Steve Trautman Co.’s succession planning process. These are the steps our Certified Consultants will help your leadership team take in order to choose the right successor(s).

Step 1: Choose the person

Which executive are we building this succession plan for? 

Step 2: Deconstruct their work

What does the executive do? Our team will use the Knowledge Silo Matrix to accurately identify all the hats the exec wears, as well as to quantify their tacit and implicit knowledge. 

Step 3: Identify successors for each silo

Once the KSM is completed, we’ll use that to filter through your company’s list of possible successors. Depending on the level of work required, it may be necessary to replace one executive with 2-4 successors. 

Step 4: Ensure that successors want to be groomed for the role

The success of this entire process depends heavily on the desire of successors to be promoted into the executive’s role. Communicate clearly to your choices and ensure they are aligned with your plans

Step 5: Begin knowledge transfer

We’ll create in-depth knowledge transfer plans to prepare your successors. Knowledge transfer empowers your successors by enabling them to take control of their own learning. It clarifies what they need to learn how to do, instead of forcing them to guess at what they need to learn. 


Result: A Superior Executive Succession Planning Method

By proactively following these steps, you and your stakeholders can rest easy knowing that a highly-trained network of successors is standing by, ready to step up when needed.

To learn more about what The Steve Trautman Co. can do for your company, contact our team today to speak with one of our Consultants. 

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