Every company has a short list of considerations when it comes to strategic planning. Near the top of that list is preparing for potential—and sometimes inevitable—shifts in leadership.

With an average of 12 weeks between the announcement and start dates for internal CEO hires and 6 weeks for external hires, seamlessly handing off leadership during a business transition requires more than a bit of forethought.Disclosure 1

“Having a succession plan is like having life insurance,” says Jason Cagle, head of Industry Specialization and Advisory at Truist Commercial. “You may not want to think about it, but it’s the best way to ensure a smooth transition.”

But, says Cagle, that means accounting for more than numbers. “Too many succession plans talk about quantitative factors of a company,” he says. “Leadership transitions that produce business continuity depend on more than that. You also have to bring in things like the lifecycle stage of your business, the relationship dynamics of teammates and external partners, and the company’s long-term goals.”

Succession planning is never easy. But if you keep these things in mind, you may alleviate some of the stress of the process and come out ahead.

Account for more than numbers to ensure a smooth exit.

“Unexpected changes—like an exit timetable getting pushed forward—can make transition plans that just go point-by-point with dates and figures too rigid to adapt,” says Cagle. “Factoring in important qualitative aspects of your business increases the likelihood of a smooth handoff. With a more comprehensive view of your company’s context, you can better script flexible transition plans.”

A company’s business lifecycle stage is one of the fundamental considerations to include for gaining that larger view. Paired with a projected exit date, it provides both a framework for timing leadership succession and brings the hiring criteria for incoming executives into sharper focus. For example, if you’re experiencing booming growth as leadership changes hands, you may want a CEO who has led an established business, which is where you’re likely headed next.

“No matter your situation, the first step to creating a smooth business transition is adding in those three-dimensional aspects to get a clearer picture of your overall context,” says Cagle. “Once you’ve done that, you’re in a position to start designing a more adaptive succession plan with help from your Truist relationship manager.”

Factoring in important qualitative aspects of your business increases the likelihood of a smooth handoff. With a more comprehensive view of your company’s context, you can better script flexible transition plans.
—Jason Cagle, Head of Industry Specialization and Advisory, Truist Commercial

Widen your communications to include all stakeholders.

Human dynamics matter. Keeping everyone involved in succession planning can ensure they’re moving at the same pace when you pass the baton. For instance, block out an afternoon to discuss the staff’s practical, day-to-day leadership expectations. Encourage them to share what they liked and what they think could be done better. This can help empower employees by emphasizing the role they’ll play in making a successful transition.

“The same goes for business partners and customers,” says Cagle. “A conversation with an incoming executive can help them feel less like they’re taking a risk with your new CEO, but instead are starting an exciting new chapter with a company they’ve trusted for years.”

Involve your Truist relationship manager in the conversation as soon as possible too. They can bring in banking partners as needed to analyze considerations about the future of your firm. If you’re the one leaving the company, they can also bring in associates from Truist Wealth to help you prep your family finances, as well as the Business Transition Advisory Group

Prefill gaps in experience and resources for your CEO-to-be.

In family-run ventures, the owner’s successor is often a child, sibling, or other close relative. Sometimes, these family members are heading into a business transition with know-how and a bold vision but no experience at the helm.

If so, your transition strategy should include time blocked out for frank conversations about gaps between their vision and the company’s current capabilities and resources. They may benefit from leadership training, such as the Truist Leadership Institute’s TORCH program, or by having existing execs and managers assist with areas that aren’t their specialty.

Also, discuss where a new leader plans to focus their efforts. For instance, if it’s a CEO, are they looking to experiment with new product lines? Expand into new markets? Acquire competitors?

Working through questions like these with a relationship manager in advance will not only apprise your CEO of the capital and support they need but will inform members of the C-suite what training and resources they need to empower the incoming executive.

“Leadership transitions affect everyone in your organization—so if you’re getting a little overwhelmed or having trouble being objective about one, that’s normal,” says Cagle. “We’re here to help you navigate the nuts and bolts of this life-changing event. It’s one of the things we do best.”

What lifecycle advice can benefit you right now?

Contact your Truist relationship manager to see how we can find custom solutions to meet your evolving needs.

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