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The five levels of succession. The only way a company can grow through decades is through embracing a culture of succession. Succession must be initiated by senior leadership. Succession is what most companies should do, but what the least of them end up working on; this is because leaving your ego at the door and looking for the next generation of leaders is hard. Apart from being personally hard for people, it is complicated. There are different levels of succession. Lets take a deeper look at the five levels of succession.
- Management succession
Management succession looks for the growth and development of the next generation of leaders. In order for the current management and the company to grow, this process is very much needed. Weak individuals usually shy away from this process, while strong individuals embrace it.
- Ownership succession
Ownership and management succession can feel like the same thing, but trust me, they are very different. Ownership succession refers to the next generation of stockholders. Being a stockholder doesn’t mean that you lead, manage, or run the company. Stockholders benefit from profits and dividends.
- Cultural succession
Culture is what makes a company great. In order for the organization to keep succeeding the culture should play as an important role as before and should never be overlooked. Culture is driven by strong leadership and must follow the company’s mission and vision.
- Leadership succession
Most companies struggle with leadership succession. If we are talking about a small company, family gets in the way most of the time. We have to remember that the “gene pool” might not be the deepest pool for the next generation of leaders. Leadership is earned. Looking for an outsider to lead the company might be a good idea. Many factors need to be considered.
As you can see, succession is a very important yet complex topic. If you haven’t thought about your succession plan or you need to polish it, make sure to work with a business lawyer. Focus Law is an established and growing law firm that helps clients with various needs, including succession plans. Call us today at (714) 415-2007, or schedule a Kick-off meeting by clicking here.