Business Succession Planning For Dummies®

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Table of Contents

About This Book
Conventions Used in This Book
Foolish Assumptions
How This Book Is Organized
Part I: What Is a Succession Plan, and Why Do You Need One?
Part II: Creating a Plan and Putting It into Action
Part III: Diving Deeper into Succession Planning
Part IV: Keeping the Succession Ball Rolling
Part V: The Part of Tens
Icons Used in This Book
Where to Go from Here
Part I: What Is a Succession Plan, and Why Do You Need One?
Chapter 1: Sowing the Seeds for Long-Term Success
Why You Need Succession Planning
What happens when you don’t have a succession plan
What a succession plan can do for you
What Makes a Succession Plan Successful
The key characteristics of a successful succession plan
How succession plans vary in different types of organizations
Responding to different needs
How to Establish Your Succession Plan
Developing the plan
Implementing the plan
Dealing with implementation problems
Monitoring and evaluating the success of your plan
Chapter 2: Why Succession Planning Matters
Ensuring the Continuation of Competent Leadership
Top leadership
Key leadership at other levels
Retaining Highly Competent Employees
Guarding against the loss of key talent
Improving competencies throughout your organization
Providing employee development
Offering advancement opportunities
Reaping the benefits of a competency-driven culture
Keeping Up with 21st-Century Trends
The Internet information explosion
Social media
Workforce changes
Recognizing the Consequences of Not Having a Succession Plan
Chapter 3: Pinpointing the Right Type of Plan for Your Organization
Expecting the Unexpected
Laying the Groundwork for Planned Transitions
CEOs or other key leaders
Family business owners or organization founders
Board members
Strategically Mapping Your Organization’s Future
Meeting your current strategic needs
Planning for your future strategic needs
Changing your strategic plan
Part II: Creating a Plan and Putting It into Action
Chapter 4: Preparing the Plan: Six Steps to Success(ion)
Step 1: Figuring Out What Type of Plan You Need
Are you facing unexpected departures?
Are you thinking about planned departures?
Are you thinking strategically?
Step 2: Forming Your Planning Team
Selecting the right team members
Establishing an effective team climate
Figuring out who does what
Step 3: Determining What Factors Will Influence Your Plan
Trends in the marketplace
Changes in talent pools
Generational and cultural diversity
Step 4: Linking Your Succession Plan to Your Strategic Plan
Aligning the succession plan to your vision, mission, and strategies
Partnering with HR
Identifying positions that need to be filled
Step 5: Identifying Potential Candidate Sources
Identifying needed competencies
Developing a list of internal potentials
Compiling external sources of talent
Training to develop needed talent
Step 6: Putting It All Together
Establishing your goals
Describing the process steps
Specifying a timeline
Communicating the plan
Now What?
Chapter 5: Implementing the Plan
Collecting Baseline Data
Starting Off on the Right Foot
Circulating a formal version of your plan
Preparing presentations
Garnering Broad Support for Your Plan
Meeting Challenges Head On
Recruiting external talent
Recruiting internal talent
Making a decision
Monitoring and adjusting as you go
Learning from Your Mistakes
Chapter 6: Evaluating the Plan’s Implementation
Phase 1: Identifying the Criteria for Measuring Success
Stating your plan’s goals
Translating your goals into specific outcomes
Developing measures of success
Phase 2: Determining the Types of Data You Need
Yes or no: Non-metric data
Metric data
Qualitative data
Phase 3: Monitoring Your Plan and Collecting Data
Phase 4: Sifting Through the Data
Phase 5: Making Recommendations
Chapter 7: Overcoming Obstacles in Implementing Your Plan
Anticipating Obstacles and Preparing to Deal with Them
Pushing Past Planning Obstacles
When your planning team doesn’t play well together
When your succession plan conflicts with your overall strategic plan
When you don’t have a supportive planning environment
Jumping the Obstacles People Put Up
When your CEO is the problem
When other people are standing in your way
When skepticism reigns
Solving Process Problems
Staying on Task
When you’re having trouble with analysis
When you’re not finding the right people for the job
When developing people within your organization isn’t a cakewalk
When you can’t make up your mind
When you’ve found the right person but hiring hurts
Part III: Diving Deeper into Succession Planning
Chapter 8: Covering Key Positions in Your Succession Plan
Leadership Positions: Where You Lead, I Will Follow
Top management
Key managers
Other key positions
Looking Ahead: Fine-Tuning Your Plan for the Future
Anticipating changes in the marketplace
Keeping up with your strategic plan
Making Sure Your Plan Meets Your Organization’s Unique Needs
Chapter 9: Figuring Out What You Need in a Successor
What Are We Really Talking About When We Talk About Competencies?
Assessing Current Competencies
Step 1: Identify job information resources
Step 2: Collect data
Step 3: Organize the data as you collect it
Step 4: Develop interviewing guidelines for recognizing candidate competencies
Step 5: Develop rating scales to use when interviewing a candidate
Looking At Competencies for Key Positions
Top leadership competencies
Competencies for other key positions
Determining Future Competencies
Chapter 10: Identifying and Developing Successors within Your Organization
Creating a Competency Culture
Developing Current Employees’ Competencies
Identifying potential successors
Creating individual development plans
Providing in-house training
Coaching and mentoring people
Giving special assignments
Sending employees to professional association meetings
Encouraging employees to go back to school
Reinforcing Your Competency Culture
Chapter 11: Aiming for a Smooth Transition
Making a New Hire Feel at Home
Handling Successions in Specific Types of Organizations
Large for-profit organizations
Nonprofit organizations
Small businesses
Educational institutions
Governmental organizations
Dealing with Internal Dynamics
Helping managers develop an empowering culture
Creating a problem-solving mindset
Promoting teamwork
Building a climate of trust
Part IV: Keeping the Succession Ball Rolling
Chapter 12: Making Great Exits
Before the Exit
Enlisting the support of your managers
Getting the support of your board
Learning from exiting personnel
Educating the new hire
During the Exit
Keeping your managers informed
Keeping employees in the loop
Helping a new hire feel welcomed
After the Exit
Supporting the new hire
Revising the exit process where necessary
Expecting the Unexpected
Something happens to the new hire
Something happens to the economy
Something happens in the marketplace
Something in your perception of the new hire changes
Chapter 13: Maintaining Your Plan in Today’s Changing Workplace
Three Key Trends in Today’s Workplace
The multigenerational workplace
The culturally diverse workplace
The technologically sophisticated workplace
The Impact of the Key Trends
The multigenerational workplace
The culturally diverse workplace
The technologically sophisticated workplace
Modifying Your Succession Plan to Adjust to the Key Trends
Part V: The Part of Tens
Chapter 14: Ten Mistakes That Sabotage Succession Plans
Not Making Succession Planning a Priority
Not Developing a Full Plan
Not Aligning Your Plan to the Marketplace
Not Considering the Changing Composition of the Workforce
Not Getting Support from the Top
Not Effectively Communicating Your Plan
Not Getting Organizational Support
Not Using Social Media Effectively
Not Effectively Monitoring Your Plan
Not Providing Enough Support for the Successor
Chapter 15: Ten Ways to Keep Your Succession Plan Alive
Build a Competency Culture
Construct an All-Inclusive Succession Plan
Involve Managers in the Planning Process and Get Their Support
Link Your Succession Plan Directly to Your Strategic Plan
Link Your Succession Plan to Your Mission Statement
Turn Your Succession Plan into an Ongoing Process
Plan to Change
Emphasize the Development of Internal Candidates
Build and Maintain an External Network of Successor Candidates
Continually Monitor and Adjust Your Plan Where Needed
Cheat Sheet

Business Succession Planning For Dummies®


About the Author

Arnie Dahlke has a PhD in psychology from the University of Minnesota. Over the years, he has taught full time in both psychology, business, and organizational development departments, served as a director of research for the American Institutes for Research, and worked as an independent consultant.

Arnie has assisted both private (for-profit and nonprofit) and public organizations, using coordinated team-building strategies and process-improvement tools. He brings people together in a spirit of mutual trust, cooperation, and constructive problem solving. As described on his website (, he helps people in organizations cultivate both continual improvement and customer-responsive mindsets.

Arnie’s private-sector clients have included larger corporations, such as Chevrolet, Saturn, Coca-Cola, Gelson’s: The Super Market, and Northgate Market; healthcare facilities, such as counseling centers and Northside Hospital; smaller organizations, such as the law firm of Ferruzzo & Ferruzzo, Able Computer, New Media Broadcasting Company, The Party Staff, and Your Staff; and automobile dealerships representing a variety of franchises, including Chevrolet, Chrysler, Ford, Honda, Infiniti, Mitsubishi, Nissan, and Toyota. His work has helped companies win national awards. As a consultant to the Human Interaction Research Institute of Westwood, California, he conducted interviews in California, Missouri, Nevada, Texas, and Utah at local community mental-health centers for the purpose of identifying the factors that go into the sustaining or non-sustaining of innovative procedures in organizational settings.

Arnie’s public-sector clients have included both cities and county departments. He has assisted city- and county-management staff, police departments, libraries, and planning and public-works departments in such cities as Washington, D.C., and Los Angeles, Santa Ana, San Bernardino, Santa Rosa, and Torrance, California.

Throughout his career, Arnie has kept alive his love for teaching. He has taught courses and seminars in psychology, organizational behavior, and organizational consulting. He has taught at all levels, from adult students to college freshmen to graduate students at many colleges and universities, including Antioch University, the California School of Professional Psychology, Marymount College, Phillips Graduate Institute, Ryokan College, the University of California, the University of Maryland, the University of Minnesota, the University of Nevada, and the University of Oklahoma.


I dedicate this book to all employees, because their morale and futures are dependent on the quality and successful implementation of succession plans in their organization.

Author’s Acknowledgments

I appreciate the help of everyone who has helped me put this book together. It has been an exciting, although somewhat exhausting, experience, and it’s taught me that you never know how much you know until you start putting it down on paper. I was surprised to find how much I know.

A special thank-you first to my brilliant in-home editor, my wife, Lesli, who pays attention to the slightest detail and improves what I do in subtle but dramatic ways. She has tirelessly supported my efforts through thick and thin, including very long hours spent writing.

I also want to thank Erin Mooney at John Wiley & Sons for giving me the opportunity to write this book; Ken Lloyd for his insightful comments and technical suggestions; and Elizabeth Kuball for her patience, helpful suggestions, and meticulous editing.

Publisher’s Acknowledgments

We’re proud of this book; please send us your comments at For other comments, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.

Some of the people who helped bring this book to market include the following:

Acquisitions and Editorial

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Cover Photos: © / james steidl

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Publishing and Editorial for Consumer Dummies

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People come and people go in every organization, from large corporations to small family businesses. Some departures are planned and some are unexpected. Your innovative CEO retires. A key programmer in your IT department decides to take a job elsewhere. Your CFO has a heart attack.

When key people leave your organization, you’re faced with the task of replacing them. If you have no succession plan in place, a departure can cause waves of disruption to spread throughout your organization. But if you’ve taken the time to lay out a careful succession plan, the departure may be a mere ripple. It’s up to you.

About This Book

I wrote this book to help you develop and implement a fully functioning succession plan. Business Succession Planning For Dummies includes a wide range of tips, techniques, and strategies for defining your succession needs, identifying and developing successor candidates, and effectively bringing them onboard.

Every chapter in this book stands on its own. You don’t have to read the book from beginning to end. Simply choose the chapter that fits your needs, and dive in!

Conventions Used in This Book

I use the following conventions throughout this book to make the material easy to understand:

check.png All web addresses appear in monofont. When this book was printed, some web addresses may have needed to break across two lines of text. If that happened, rest assured that we haven’t put in any extra characters (such as hyphens) to indicate the break. So, when using one of these web addresses, just type in exactly what you see in this book, pretending as though the line break doesn’t exist.

check.png Bold is used to highlight the action parts of numbered lists.

check.png When I introduce a new term, I italicize it and define it shortly thereafter, often in parentheses.

Foolish Assumptions

As I wrote this book, I made some assumptions about you, my reader:

check.png You’re a manager or human resource professional, and you want to implement a long-term succession plan for your organization.

check.png You want a smoothly functioning organization today and in the future. You know problems will occur. You know people will come and go. But you value doing whatever it takes to be prepared.

check.png People are your most important resource. Yes, you need to make a profit. Yes, your long-term success depends on having a stable customer base. But it’s your people who make those things happen.

check.png Key positions exist throughout your organization. Yes, the loss of your high-powered CEO would be very disruptive. But your organization also would suffer if it lost other key talents: the IT specialist, the brilliant CFO, the star salesperson. . . . People in many key positions make major contributions to your organization’s success.

check.png You see the value of having the right person in a key position. You’d rather have the right person in the right job than place a person in a position and hope that things work out. You believe that having the right person in a key position is critical to your organization’s success.

check.png You see the importance of planning. Yes, planning takes time, and people are busy doing their regular jobs. Nonetheless, you recognize the importance of planning now in order to avoid problems in the future.

check.png You need some help. You’ve tried to develop a succession plan. You may even have one halfway finished. Or you may have a finished one that just doesn’t seem to be working the way it should. Whatever the case, you need some help.

How This Book Is Organized

Business Succession Planning For Dummies is divided into five parts. Here’s what each part covers.

Part I: What Is a Succession Plan, and Why Do You Need One?

This part is focused on the importance of having a well-developed succession plan. Here I tell you why you need a succession plan in the first place and which type of succession plan you need. I also tell you some of the consequences of not having a succession plan and some of the benefits of planning (in case you aren’t convinced that succession plans matter).

Part II: Creating a Plan and Putting It into Action

This part is focused on the mechanics of preparing and implementing a succession plan and monitoring and evaluating its success. Here I tell you how to build your succession-planning team, establish the specific goals of your plan, successfully implement your plan, evaluate the plan, and handle obstacles along the way.

Part III: Diving Deeper into Succession Planning

In this part, I show you how to customize your succession plan for various key positions. You find out how to determine the competencies needed for those positions, as well as develop the competencies of potential successors within your organization. Finally, this part shows you how to ensure a smooth transition.

Part IV: Keeping the Succession Ball Rolling

Your work isn’t over after you’ve written your plan. You need to make sure that your plan is well maintained and able to adapt to changes in your organization, its marketplaces, and the economy and society at large. In this part, I tell you what you need to do before, during, and after someone’s exit. I explain how to identify changes taking place in the workplace and determine the impact of those changes on your organization. Finally, I guide you through adjusting your succession plan in response.

Part V: The Part of Tens

Every For Dummies book ends with a Part of Tens, and this book is no different. In this part, I provide ten common mistakes to avoid and ten ways to keep your plan alive.

Icons Used in This Book

Throughout this book, I use three icons to highlight different kinds of information. Here’s what they mean:

Remember.eps You don’t have to memorize the information in this book — there is no test at the end — but the Remember icon highlights important information that’s especially worth remembering.

Tip.eps The Tip icon points out information that makes the planning process more efficient or just plain easier.

warning_bomb.eps The Warning icon draws your attention to potential pitfalls and danger spots that crop up when implementing a succession plan. Forewarned is forearmed.

Where to Go from Here

If you have no succession plan presently in place, not even a partial one, Part I is a good place to start. If you already have a plan in place, which chapter you’ll want to read depends on your needs. For example:

check.png If you’re having difficulty implementing your existing plan, take a look at Chapter 5 for suggestions on how to make it work and Chapter 7 for tips to overcome implementation obstacles.

check.png If you’re concerned about the degree of your success in implementing your plan, take a look at Chapter 6 for some tips on monitoring and evaluating your plan.

check.png If you need more ideas for identifying and developing successor candidates within your organization, spend some time reading Chapter 10.

When in doubt, the table of contents and index make it easy to find the information you need.

Part I

What Is a Succession Plan, and Why Do You Need One?


In this part . . .

Succession planning will help you clarify the short-term and long-term staffing needs of your organization, and then set up a tailor-made plan to identify, attract, and deploy the right people for the right jobs. It’s as much a road map to the future as the future itself!

In this part, you see the many ways in which a succession plan strengthens your organization, ensures the continuity of strong leadership, and establishes a long-range strategy for success. You also discover the basic types of succession plans and how they benefit the needs of your organization, today and in the future.