The CEO is about to stand up and address important members of the company about a strategy to turn things around but suffers a fatal heart attack just hours before the meeting.
What do you do?
This isn’t just a scenario. It actually happened to the most well-known company on the planet: McDonald’s. Back in 2004, McDonalds was taking a beating in the media because of its products’ high fat and salt and general unhealthiness.
Incumbent CEO, Jim Cantalupo, was about to address a delegation of franchise owners about the company’s plans to adjust the menu’s nutritional value and change the public’s perception of its offering. With a few hours before the presentation, Cantalopo suffered a major heart attack and died.
What next?
Fortunately Charlie Bell had been steadily working his way through the McDonald’s ranks and was presently the company’s president and chief operating officer. Within moments of the crisis striking, Bell was promoted to CEO, was briefed, and presented to the delegation.
During his time as CEO, Bell spear-headed campaigns to make McDonald’s menu healthier as well as introduced the McCafe concept, resulting in a successful turnaround in McDonald’s flagging share value and general fortunes. Had McDonald’s not had a person in line to immediately step up to the helm, the story could have been very different.
Your business without you
Whether you’re planning on extricating yourself from the driver’s seat of your business or want a back-up plan in place in case of an unexpected crisis, the bottom line remains that you should rather have a succession plan and never use it, than face a crisis with none.
When you’re in the thick of running a business though, it’s generally not a priority figuring out who will take over the reins should you no longer be able to.
So how do you identify your heir and how can you best prepare for it? Here’s four steps:
- Put time on your side. While you might only be planning on retiring in 25 years’ time, you should still have a good idea of when you’re going to step down. You should also have someone lined up who can run the place if you’re incapacitated or die unexpectedly. When sussing out your heir, promoting from within gives your heir the advantage of knowing the business from the inside out, and knowing many more levels of the job than an outsider.
- Think skills not relationships. While the saying “it’s not what you know, but who you know” has been around forever and exists for a reason, don’t let nepotism or friendship influence who your successor will be. While you may upset people by selecting the individual who is most capable rather than the one who is schmoozes best, your selection should be about the survival and growth of your company. Have a look at your business’s timeframe of where you want it to be in five, ten and fifteen years. What experience and skills will be necessary to lead the business then? Make a list of the skills you would need during such a time and match them to someone who can be trained to suit.
- Heirs are like suits. You need to find the right fit. Once you have a clearer understanding of what the new leader’s job description will be, start looking. You may find a business partner who’s fought in the trenches building the company, or you may find a bright young thing who, once trained and more experienced, will be ideal. Where a successor is not obvious, find an independent management consultant and get outside opinion.
- Dry runs. It’s all well and good having identified an heir, but without practice and preparation they could drop the ball when it matters most. Start giving them challenges that stretch or develop the skills they’ll need to lead the company. This way you can test their leadership skills and gain confidence in your pick. In the early stages, supervise and advise your heir to ensure your knowledge is passed on and the candidate has proper understanding before you begin slowly extricating yourself.