3 tips to improve your succession planning

July 31, 2019

By Kreston CEO, Liza Robbins.

“I was very attached emotionally to my firm, and it was difficult to let go.”

This is an incredibly common thing retiring leaders face.

You spent decades pouring blood and sweat into a firm you’re proud of… Passing it onto someone else can be difficult.

Over the past few weeks, I’ve spoken to several former leaders of Kreston firms, as well as several partners who are helping their firms institute successful succession planning processes.

These included Andrew Griggs and Clive Stevens from Kreston Reeves (and former Kreston Chairman) in the UK, and David Levi from CBIZ in Minneapolis, Minnesota.

I asked them how their firms handled succession planning, and what they learned as they wound down their own roles.

So today I’ll share with you three key lessons I learned from these successful leaders, to make that transition easier.

Lesson 1 – Communicate early

Close relationships with your team were vital for the development of your firm.

So changing this dynamic can feel like a painful process…

…And a big change at the top can create uncertainty and instability throughout the organisation.

To seamlessly transition from one leader to the next, start succession planning early.

Talk openly with your staff about partners’ desire to retire, and be clear about what the transition period will look like.

This makes the whole process transparent and gives your team the reassurance of knowing that there is a plan in place.

For this to happen, though, you’ll need total clarity on who is retiring when.

The leaders I spoke said their firms kept track of their partners’ retirement plans.

One even kept a spreadsheet, laying out exactly where every key member of staff is in their career, so that they could plan not just the partners’ futures but the entire team’s.

Actively managing your people’s careers is key.

When younger staff members know that you are thinking about their career path, your team will likely trust you more, increasing their loyalty. And you’ll have taken the first step towards developing the next generation of leadership for your firm. (See Lesson 3.)

Lesson 2 – Clarity for clients

The next vitally important task is to handle client relationships, so none of the goodwill and trust you’ve built is disrupted when partners retire.

If the retiring partner has had close relationships with key clients, making sure they understand the transition plan can deepen the trust and confidence the client has in your firm.

Look, you’ve spent years nurturing these relationships. To ensure they continue, introduce them to the next leader early. Your clients begin to trust the new leader and know they are in good hands.

The former Kreston leaders we spoke to agreed that this transition should start around three years before retirement.

This gives the new leader and client time to create their own relationship dynamic, and gives the managing partner the chance to gradually bring their time with clients to an end.

During this transition period, the new leader needs nurturing and mentoring from the retiring partner. This helps them learn the intricacies of key client relationships and continue the legacy your firm is known for.

One leader noted that the policy in his firm was for every client to be shared amongst two partners at all times.

That way, the relationship was with the firm – not any one individual – mitigating the damage when a partner left.

Lesson 3 – Engage young talent

The final lesson is to connect with young talent in the firm, take them under your wing, and mentor them as they grow.

This time and attention not only increases their loyalty to the firm, but allows them to see how a senior or managing partner thinks and acts – exposing them to how the firm functions.

Do not expect people with talent to know, instinctively, how to manage a firm. This is a skill which must be actively taught and learned.

One leader said that they deliberately bring younger staff members onto the Board, even if that means that others have to make way.

And everyone I spoke to emphasised the need to help younger staff develop soft skills like strategic thinking, and how to manage a team – skills every leader needs, but often get forgotten as we emphasise technical accountancy skills.

Of course, if you want to nurture your young talent so they become well-rounded leaders who can eventually help run the firm, there’s a lot more to it than that.

I’ll go deeper into that in my next blog.