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Transition in the non-family organization Add to ...

Does an organization that is not a family-owned operation have to worry about succession? If so, what should it do?

Leadership succession is as important for non-family–owned organizations as it is for the family firm. In fact, it could be argued that leadership succession of corporations and associations is more important because it affects the core of the operation's strategy for conducting business. So leadership succession becomes a core part of the operation's strategic plan.

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Most corporations have governing boards of directors that are quite aware of this problem and insist that the company always have an up-to-date succession plan in place. And, increasingly, many associations and other organizations are insisting that a succession plan of some sort always be in place to guide the operation in the event of some unforeseen circumstance such as death of the leader.

Succession planning for an organization is similar to that for a family firm. However, an important difference is that there is usually much more emphasis on how the successor will implement, or manage, the operation's strategy. Therefore, there is often an added importance to choosing the proper candidate for succession.

Whereas previously the job invariably went to the second in command, or the next person in line, most organizations today thoroughly search within and outside the organization for the best candidate. Also, this is increasingly becoming a more open process because many stakeholders are involved with an organization, and they can become quite upset if they are kept in the dark about what the organization is doing.

For most organizations, the keys to a successful leadership transition are that the leader announces a date of departure, a thorough search is conducted for a capable successor, communication among stakeholders is constant and finally, a smooth transition is made.

Increasingly, an advisory role is often found for the departing leader, who usually possesses wisdom that can help the successor.

Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.

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