Succession Planning: making the move to None Executive Director

Whether you call yourself a CEO, Managing Director or Founder, there’s likely to come a time when you realise you can’t hold the reins forever. That can be for a variety of reasons; retirement, more time with family, time for yourself, or time to explore a new business idea.

Succession planning is the process of identifying and developing who will fill key leadership positions within your business so that you can take that step back.

It’s a pretty critical aspect of securing the longevity and sustained growth you’ve spent all these years working on.

We’re often approached by business owners who know it’s time to start planning for the next phase of their business, and usually they need some paractical advice on what to do and when to do it. If that’s you, keep reading.

Most business owners don’t want to let go completely, so setting up a person or team of people to run the business whilst you take a None Executive (not involved in the day to day running of the business, at all) role is the perfect balance.

Keep in mind that you’ve always got the option to sell up, and if that’s the route you’re hoping to take, succession planning might not be something you’ve considered. It’s still pretty important you’ve got a management team who can carry your business through a merger or sale, or you might even want to sell to an existing employee(s). That isn’t uncommon.

Ready to do it? Ok… follow these steps.

Step 1: Identify potential

Consider who you already have working in the business, have a think about their commitment, attitude and leadership skills. It’s natural to look for someone who mirrors your own traits, but the true value of succession planning lies in being brave and purposely picking someone who thinks a bit differently to you.

Change is constant. Adapting to new technologies, evolving consumer demands, and shifting market trends requires fresh perspectives and innovative thinking. With different generations comes a new approach, it’s gonna be pretty hard to find a clone of yourself no matter how hard you try, so don’t.

If you don’t think the right person already works for you, work out what you’re missing and go on the hunt for someone who ticks the majority of those boxes. You might have to be patient with this option but it’ll be worth it long term.

Step 2: Grow that potential

Once you’ve identified potential successor, you’ll need to have a pretty frank conversation with them about their career aspirations. For some people a Managing Director role is not in their plan, and you’d be wasting your time developing them for something they’re always going to turn down. Of course we hope they’d bite your hand off, and if they do, you’ll need to set clear expectations about your plans to hand over the reins and what that would mean for them personally.

It’s unlikely you’ll have made a Managing Director job offer before, so consider what salary and benefits you’d like to offer and test this against the market. Do you want to offer any equity in the business as part of the deal? Get your accountant involved at this point.

It’s unlikely this person will be perfect and ready to take over in a matter of days, so work together to identify their gaps and plan how you’ll close them. An executive coach would be a great addition here, they’ll have helped people just like you a hundred times before, and can offer some really great practical steps to get you both ready for the transition.

Step 3: Communication and Planning

At this point you’ve selected your successor. Scary but exciting! It’s really important you start as you mean to go on and have an open and honest discussions with your new MD about the transition plan. This includes clarifying roles, responsibilities, expectations and a timeline. Be honest if you’ve not done this before and offer reassurance that it’s likely to be a bumpy ride for a while until you both find your way in your new roles.

Talk about how you plan to share this news with wider colleagues, it’s important to stay a step ahead with this so you beat the office whispers. Make sure info doesn’t trickle out to clients yet, it’s important you have those conversations yourself.

Step 4: Transition Strategy and Handover of Information

Develop a clear plan for the transition. Decide on a timeline and specific tasks that need to be accomplished during the transition period. Build this together so it doesn’t feel too one sided, and document it all really clearly.

Share essential information about the business with your new MD. This includes details about operations, finances, key contacts, and any ongoing projects. It’s likely you’ve got a few “secrets” that need sharing at this point too.

Step 5: Introductions

Introduce them to key people, such as your accountant, any consultants, clients, partners, and employees they don’t already know. This helps build trust and a smooth transition. The longer the lead in on this the better, so you can manage these key relationships carefully. It’ll be important these people don’t just keep calling you when there’s a problem, they’ll need to understand you’re taking a step back and it’s not appropriate for them to go around your new MD. (Easier said than done with some clients we know! You might have to suck it up for a couple of them…)

Step 6: Support and Guidance

Offer guidance and support to the new MD during the transition. Be available to answer questions and provide insights as needed, be a completely open book. They need to know it all, have access to everything, and know they can count on you whenever they need you. It’s still very much a partnership and the early days will require a fair amount of hand holding.

Step 7: Delegation

Gradually start the hand over of your day-to-day responsibilities. Start with smaller tasks and gradually increase their responsibilities as they become more comfortable in their role. You might find yourself struggling with the loss of control at this point, or start to twitch when they’re doing things differently to you. Try really hard not to project those feelings onto them and only intervene if you truly feel they’re heading in a catastrophically wrong direction.

Step 8: Monitoring Progress

As your involvement reduces, you should be keeping an eye on how things are progressing under their leadership. Structure this how you would any manager/employee performance review. Offer well thought out and constructive feedback. Consider the benefit of consulting with other staff members about their experience during the transition. Don’t be too upset if they don’t say they’re missing you loads! We all need a bit of change.

Be open to receiving feedback from the new managing director and the team yourself. If adjustments are needed to the transition plan, be flexible and willing to adapt.

Step 9: Really embrace your Non-Executive Director role

As you transition to your role as a non-executive director, focus on providing strategic direction, offering insights, and contributing to high-level decision-making. Structure quarterly meetings, this distance will mean you won’t be tempted to get involved in the day to day activities.

Step 10: Get a hobby

Your involvement at this point should be minimal, so you’re gonna need to fill your time with all the things you weren’t able to do when you were growing your business. Have fun, relax, spend time with your family, safe in the comfort that your business remains in capable hands without you.

We’re confident if you follow the above steps you’ll have a successful transition, but we know some things are much easier said than done. Those 10 steps are obviously the “light” version of the reality. There is more to it, but in essence it’s a simple process that needn’t be intimidating.

Your business is your baby and you want to get this right, so if you’d like any support we’d love to work with you to get it done properly.

Send us a message, it would be great to hear from you.