Those companies without a plan could find themselves in trouble when the unexpected happens—something as tragic as the sudden passing of a founder or CEO. “The trap is that they don’t do succession planning,” Colonial’s Rigrish says. “It needs to be part of your plan, whether you’re private or public.”
Rigrish adds that the plan doesn’t necessarily have to follow any template. There just needs to be one beforehand. “The formality of that plan should match your culture,” he says. “Some companies need structure and written documents and practices and procedures. Other companies just need to know how they’re going to do things.”
Bell Partners – Steven Bell
Credit: cleftwich
Steven Bell, chairman and CEO of Greensboro, N.C.–based Bell Partners, has often said that one day, he wants to have his grandchild run the business he founded. Thanks to moves Bell has made over the past couple of years, the company is solidly on that course. The elder Bell has put in motion a plan for his sons Jon and Durant to take over the firm. “We all agreed that for them to go out and develop a skill set and prove that they could get certain things done was important,” Bell says.
Jon and Durant went to work for Henry Faison Associates and Wood Partners, both based in Atlanta, respectively. When Durant returned, Steven gave him a crash course in operations, sending him out to do property-level work for 15 months. He also made a number of key executive hires to support his sons. “This is a good case study of a man who built a wonderful company and has embraced succession in a very positive and enduring way with his sons,” says Chris Lee, president and CEO of Los Angeles–based CEL Associates, a consultant who has worked with numerous apartment companies on succession planning.
Lee recommends the company put together an advisory board, which is, admittedly, a new concept to many private firms. Upon the death of the founder or owner, the board becomes a formal entity. “The advisory board allows an objective way of looking at the company,” Lee says. “The board is helpful in assuring the fulfillment of the [succession] plan and the performance of the company.”
2. Even if You Know Who You Want, Look Outside.
When Lee is working with his executives, he first asks them to do an exercise that, on the surface, seems to have little to do with choosing their next leader. He asks companies to outline the strategic direction of their company. “You have to figure out where you’re going,” Lee says. “That helps define the characteristics, quality, experience level, and expertise of that next leader.”
Lee’s method of seeking the next leader in an organization forces a level of detachment from CEOs who had planned on their son or daughter inheriting their position. “We always go through where you want the company to go, so that when the CEO compares their son or daughter to that criteria, they can see if they meet that criteria,” he says. “If the son or daughter is below or on the margin, I would encourage them to see what’s available on the outside and compare their son or daughter to that.”
