How to Plan for Succession in Your Business

Whether you’re building a volunteer organization, a high growth business or a profitable side project, there is likely going to come a day when you no longer will be able to (or want to) run it.  Building something that outlasts your direct efforts is a real accomplishment, but few talk about how to actually do it.

As I just moved to San Francisco, I’ve gone through the process of succession for my role in Boston running Greenhorn Connect, a site that aggregates everything going on in the Boston startup scene.  (You obviously can’t run the day to day of such a site from another city.)

I’ve been fortunate enough to find someone great, Paul Hlatky, to take over and even managed to get my awesome team on board with the idea. This was no mistake. I was fortunate to have been able to solicit advice from some of Boston’s best leaders. I’d like to share what I learned from them and in the process of handling this succession.

Special thanks in particular to Tim Rowe of the Cambridge Innovation Center and Michael Skok of North Bridge Venture Partners for their advice for this post.

How to Handle Succession Planning for Your Organization

1) Start planning before you need a successor.

In October 2011, I talked with my team at our monthly Greenhorn Team meeting about the idea of me not always running the day to day of Greenhorn Connect. After 2 full years, it seemed like it would make sense for someone new to give Greenhorn Connect a fresh injection of energy and vision. At the same time, I was trying to launch a company, so I realized that a founder of a growing business would not have the time for a side project like GHC.

From that meeting forward, I started quietly keeping an eye out for a successor and thinking about what it would take to hand off the business. This led me to ask myself a few key questions:

  • What are the core benefits to the job I can sell someone on?
  • What is the archetype for the person & skills needed for this role?
  • What role would I expect to have after the transition?
  • What don’t I know about succession planning that I should learn about?

At the outset, I had few answers, but it gave me a framework to get started on the process before I needed my successor. It also helped me understand what questions to ask others when I had the opportunity to learn how they’d approach the challenges I felt were coming.

2) Be proactive and seek out your sucessor.

Once I realized the kind of person I was looking for was going to be a hungry student new to our ecosystem and hungry to help others that were new to the ecosystem, I needed to find some leads. By narrowing the definition of who I was looking for I was able to concentrate my search to a few student leaders starting to emerge in the community.  Since I didn’t want succession to be done in the spotlight, I had to seek them out directly and somewhat discretely.

Paul, then a senior at BU, had attended our massive conference the unconference and wrote a passionate blog post about connecting students. It came across my Twitter stream one night and I followed up with him by commenting and then meeting up with him for coffee.

3) Try before you buy.

Successions that fail don’t end well for anyone. Just ask John Sculley (aka- Jobs’s disastrous first successor). To save embarrassment for you and your potential successor, the best thing you can do is try before you buy. This means working with them and spending a lot of time with them to make sure you feel comfortable with them taking over.

For Paul and I, this trial ended up turning into a jointly organized Startup Career Fair. Pulling off a major event like this (500+ students and over 30 companies) requires a great deal of coordination and help. Paul showed incredibly skill as he recruited dozens of students to help, negotiated huge discounts from our venue and otherwise showed great business instincts. Even before the fair occurred I knew I had the right person, so I made the pitch.

4) Sell the Dream.

No matter how ugly, everyone loves their own baby. But if you’re handing it off to someone else, you have to convince them to love your baby, too.  Once you’re certain you’ve found the right person, you need to grab a pair of rose colored glasses and sell the dream of why this person should want to take over for you.

While I knew Paul was a great young hustler, I didn’t know everything about his motivations yet, so when I made the pitch, I laid out all the benefits I knew Greenhorn Connect could provide its leader. I focused on what I knew motivated me to do it as well as some of the things that were cool, ancillary benefits of the role.

If you’re stuck on what to say, just think about how Willy Wonka made it impossible for Charlie to pass on the opportunity to run the chocolate factory…and reveals much of his succession plans:

(Quite possibly the best “Sell the Dream” ever. Skip to 2:29 in the video)

5) Focus on values and key success factors.

When you choose a successor, you have to realize they are not you. You can’t expect them to do everything as you have done it before. Instead, you need to focus on instilling the core values of the role and what matters most to the success of the business or organization. These values and key success factors will act as guide posts for your organization’s new leader to make their own decisions by.

In the case of Greenhorn Connect, I shared a large Google Doc with Paul filled with insights to what I felt had made the site a success to date and things I felt were our core strengths and weaknesses.  I also shared with him many of the processes and productivity hacks I had used to run the site, but I tried to emphasize that he was welcome to come up with new strategies and tactics as long as they didn’t compromise our core values.

With what I’ve seen in Paul’s first 3 months running GHC, I can see that he learned the values and is now bringing some of his own style and ideas to the table, making Greenhorn Connect better than it was before.

5) Put them out in front.

Now that you’ve got your successor excited about the role and are instilling your values in them, it’s time to shine the spotlight on them.  When I asked Tim Rowe for advice on succession he had a lot to say about this in particular. He told me:

Give Paul the spotlight. Make it all about him. When you’re out there, let him be the one up on stage. Meanwhile, you should be in the background telling everyone, “isn’t he great?” Keep pushing him and promoting him from behind the scenes until one day you aren’t back stage and everyone simply knows he’s in charge now.

There’s a lot of pride and ego you have to swallow to do this, but in order to avoid casting a tall shadow on them, you need to let them shine while you’re still around.  It creates an intermediate step where you and your sucessor are together, rather than an instant switch from you to them that would be jarring.

6) Get out of the way.

Of all the steps, this is by far the hardest. You’re handing off your baby you watched grow and develop and now you have to trust someone else to continue caring for it. If you don’t get out of the way, you’ll end up meddling in their work, preventing them from succeeding.

To truly be a successor, they have to be able to put their stamp on it. This only comes with the independence of full control. As Michael Skok told me:

It doesn’t matter if they succeed or fail; either way if you do it right, they’ll be to blame for it, not you.

In some ways it feels heartless; when you’re handing it off, you want to feel like you have some lasting value you can provide. However,  the best thing you can do is tell them you’re there if they need you, but otherwise absent.

I’m still working at this last step. Since I stayed on as CFO at Greenhorn Connect, I still have some duties with the business. These duties are a blessing and a curse; I still get to see how GHC is doing, but it also then tempts me to interject in Paul’s work to make observations and suggestions.

Luckily, Paul is very gracious about them and he’s also strong enough to stick to his guns and do what he thinks is best. I think I’m getting better at this last step of late, but I still catch myself at times trying to prevent Paul from making his own mistakes. I have to let him make his own mistakes or he won’t learn.

Succession is hard.  But to ensure good things continue beyond the lifespan of its creator, it’s an important step in the lifecycle of every organization. I hope these tips will help you keep your great organization living on.

What advice do you have for succession planning?

2 thoughts on “How to Plan for Succession in Your Business

  1. Great post Jason! Sounds like so far it has been an excellent transition. I went through something very similar at the NU Entrepreneurs Club with Matt Bilotti. It’s tough to walk away but it seems like both Paul and Matt will end up doing a great job.

  2. Thanks for the vote of confidence Greg!

    I’d also like to point out how much time and effort Jason put into the succession. We met every week for 1-2 hours to go through the values, attended events together and followed up with introductions he made with key influencers in the scene. He was also incredibly patient with me and was always careful to comment on what I did well and what I could do better.

    There’s a lot to be said on how to properly succeed a role as well which I’ll eventually post as a follow up. In the meantime I’d just like to say thank you for everyone’s support so far and look forward to continuing Greenhorn Connect in Jason’s stead.

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