Stakeholders in Succession Planning –
What Is In It For Them?
By Jeff Mayhall
What is a company stakeholder? By most definitions, a stakeholder is essentially a person, independent party, a group, or organization that has an interest in or concern in your company and while not all equal, most contribute to the resource from which your company draws from. That is not the complete definition; stakeholders can also be affected by the company’s activities, products or services. Most importantly, the key stakeholders are directly affected by the succession plan of the company. As a busines-owner, if you want your succession plan to actually be successful, you will need buy-in from the stakeholders.
Companies should never underestimate the importance of their stakeholders. Stakeholders have intimate knowledge and views of the company and they are aware of all “on the table” and “under the table” conversations. Each company has stakeholders with distinct levels of involvement, and often with diverse and sometimes conflicting interests and concerns to each other and the company.
A company that plans its succession without thoroughly considering what is in it for the stakeholders is most likely in for a bumpy ride at the least and quite possibly a failed plan altogether. Without stakeholder buy-in, the company’s succession plan may not succeed. A good succession plan allows for the stakeholder’s voice to be heard ahead of time to address all concerns of everyone affected by the plan. In turn, this allows everyone to agree to a cohesive and transparent plan which will allow everyone to work together to achieve the intended result.
Depending on how the succession plan is viewed by the stakeholders, the plan can be considered successful and achieving important and better outcomes for everyone. The plan needs to be made with stakeholders’ viewpoints, expectations, concerns and requirements in mind and must meet each to be considered successful.
To achieve this, the company must communicate directly with the stakeholders and listen and respond to their feedback and concerns. In doing so, hurdles to the plan will be revealed as well as its strengths and even accelerators. Only then can the plan adequately address methods to deal with or avoid pitfalls that would prevent its success.
If you want your succession plan to be successful, then you need buy-in from all levels. By listening to your stakeholders, you will find:
- More affective risk management strategy in executing your plan
- A better understanding of accomplishing stakeholders needs, thereby increasing the likelihood of the plan’s success
- More informed decision making
- A shared vision amongst all key influencers
- A shared experience of expertise and knowledge that can help with the plan
Your stakeholders have, in one way or another, helped the company reach success. Furthermore, they are crucial to having a succession plan come to fruition as they will become the future leaders and possibly owners of the business. Most plans fail because they neglect to achieve succession planning at all five levels (ownership, management, leadership, culture and relationships). The first step to address these five areas is through discovery with all key stakeholders. As Don Tapscott once said, “We need to do right by all our stakeholders, and that’s how you create value for shareholders.”