Don’t Let a Generation Gap Derail your Succession Plan
Experience and expertise are two leadership qualities that business owners and CEOs earn after decades of managing through their industry. Baby Boomers who have grown their company and see retirement in the near future may be wary that the next generation – often those of Gen X or the Millennial set – approaches leadership from a different angle. Handing off their life’s work to a successor can be an emotionally charged process, and is likely to escalate when there is a lack of understanding about each side’s perspective.
Planning and executing the transition may be complicated on both sides of the deal. When our clients ask us for guidance structuring a holistic succession plan, a concern sometimes arises around cultural issues that may occur when handing over the company to leaders of a younger and very different generation.
Our succession planning advice is rooted in finance and tax issues; however, we are often tasked to help answer the following questions:
What role will the current leader play after the leadership transition is finalized?
Frequently, owners are not emotionally prepared to go “cold turkey” after the transition is complete. They may be looking for their successor to give them a role within the organization. We help determine and set guidelines so that potential conflicts are kept to a minimum when a new leader with a different skillset or vision for the organization is in charge. We ensure goals are set that benefit those from both the old and new schools; collaborating beyond the succession plan may be pivotal to the continued success of the company.
How will the transition affect employee roles and the direction of the organization?
When new leadership comes into power, current employees may have concerns about adapting to different management styles, especially if there is a significant generation gap between senior management and the incoming leaders. We encourage our clients to clarify what incoming leadership wants for the organization and which roles they find the most value in. They can then appoint other employees to lead departments or service lines that call for a certain vision or skill.
How can we create cohesion when our communication styles are so different?
Gen Xers and Millennials have come of age in an era of technology and are accustomed to transparency. They are wired to demand information in the workplace – in fact, they expect it. Boomers, however, grew up in an era of privacy; less communication was often considered the norm. Overcoming these differences can be key, as all parties work to establish the right level of information sharing for a successful transition. Effective communication is invaluable, and finding common ground can lead to much more sound outcomes. We advise clients to create communication protocols up front and to facilitate dialogue with colleagues in ways that each person prefers. We also remind clients of the value in other perspectives, experiences and approaches from different age groups and backgrounds.
AAFCPAs values a strategic, emotionally savvy approach to succession planning. We completed a successful internal transition of leadership in 2010, so we know first-hand – and are empathetic to – the emotional/personal side of the process. The personalized attention we give to our clients prepares them to face unforeseen generational communications and planning issues, so that transitions can be handled as smoothly as possible. We allow our clients to focus on their personal, financial and family goals while we focus on the rest.
To learn more about our succession planning expertise, contact your AAFCPAs partner.