Meaning
Sequential activities identify, develop, and install new leadership to replace a departing founder or senior executive. This managerial succession ensures that the company continues to function without a drop in performance during a transition. It involves finding a candidate who has the right skills and fits the existing company culture.
The process ends when the new leader is fully onboarded and the previous leader has moved out of their operational seat.
Candidate Selection
Finding the right person to take over from a founder requires an exhaustive search and deep vetting. During managerial succession, the board must decide whether to promote from within or hire an outsider. This search costs thousands of hours and significant recruitment fees.
It is a period of high anxiety for the founder, who must trust an outsider with their creation.
Knowledge Transfer
Moving the specialized information from the founder’s head to the new leader is a critical step. This phase of managerial succession often takes months of overlapping work and mentorship. It requires the founder to be patient as the successor learns the nuances of the business.
The cost here is the double salary paid during the handover and the founder’s time spent in teaching roles.
Operational Continuity
Success is measured by how little the clients notice the change in leadership.
