Leaving a Legacy: Embedding Success—and Succession—In Your Organization

Many times the fate of companies rests on the capabilities of its CEO: as the CEO goes, so goes the company. And CEOs, as they prepare to leave, do their best to guard against this. They develop a well-thought out succession plan, they work to find the right successor whose capabilities best match the company’s needs, and they otherwise do all the “right things” to leave a strong senior leadership team in their wake.

Unfortunately, this is only table stakes, and it is certainly not sufficient to keep a company ahead of eager competitors year after year. Just ask Starbucks CEO Howard Schultz, who grew a seemingly model company from startup to global powerhouse, but then almost lost it. Feeling the company was on solid footing, he stepped out of the CEO role in 2000. Slowly, the foundation of Starbucks began to erode. The culture that resulted in the “third place” to hang out other than work or home began to lose its luster. Making a great cup of coffee “every time” became “most of the time”.

Howard Schultz, seeing that all was not right, returned to Starbucks in 2008 and over a period of time restored the culture and brand of Starbucks. The company is now firing on all cylinders and the stock price is near an all-time high. But what if Mr. Schultz had not returned? More importantly, how can any CEO feel that when they step out, their company will remain vibrant for years to come and will thrive through multiple changes in leadership?

The answer lies not in the management systems, or simply in the individual at the head of the organization, but in the very DNA of the company. No company exists in a static environment, and teams across the board face challenges and hurdles with any CEO transition. More importantly, maintaining the consistency of your brand, product and value proposition lies not in the consistency of day-to-day management, but in your employees’ ability to adapt quickly to changing circumstances and customer demand. In other words, the key to leaving a leadership legacy is not merely planning for your succession, but embedding innovation in your organization and giving your employees and senior leaders the tools they need to keep things moving long after you’re gone.

One company that has succeeded at this extraordinarily is 3M, which is one of the few that has maintained a presence on the Fortune 500 since the ranking was first established in 1955. Despite a number of CEO transitions over the years, the company has managed to maintain its brand promise while still retaining the entrepreneurial spirit that spurred its founding in the early 20^th century. Despite many changes in leadership, the company has consistently produced groundbreaking products, from the soles of Neil Armstrong’s moon boots to data storage solutions. How did they do it? Since the 1940s, the company has empowered employees to spend up to 15 percent of their time pursuing their own creative initiatives (indeed, it was during this “15 percent time” that Art Fry hatched his idea for Post-Its). Over the years, 3M has instituted a number of policies that give employees permission to innovate and operate outside the traditional hierarchy. Its organizational culture is built upon the foundation of creativity.

How can CEOs do this in a way that makes sense for their organization? In his recent article “Accelerate!”, Harvard Business School professor and leadership guru John Kotter makes the case for developing two parallel structures in the company that operate in concert with each other. The traditional hierarchy operates on one side, and ensures that day-to-day work gets done in the most efficient manner possible. This structure is well-suited for execution, and is a go-to for carrying out a new business plan.

On the other side, companies that embed innovation within the culture develop a network of employees who are empowered to search for innovative solutions to existing challenges and to offer new ideas. The employees in this network are organized into “guiding coalitions” made up of volunteers from all levels and areas of the organization, thus giving the team the opportunity to flex their creative muscles, attack challenges from all directions and develop the leadership skills necessary to keep the organization nimble in the wake of senior leadership turnover. The guiding coalition is where innovation is nurtured, and breaks down the barriers inherent—and necessary—in a hierarchy. By virtue of being a group of willing volunteers with diverse perspectives, this structure maintains the urgency and enthusiasm necessary to foster organizational agility.

With both the hierarchy and the guiding coalition working side-by-side, a company develops a transformative, repeatable process that allows it to adapt quickly to a changing world and stay ahead of the curve. Most importantly, it ensures that a company’s success is no longer tied to a single person; rather, it is now embedded in the DNA of the company through a new way of operating.

So, as a CEO prepares to depart his organization, he should be asking himself more than “Did I prepare my successor well?” He also needs to be asking, “Have I left my organization a more agile, innovative place?” If the answer is yes, he has embedded success for generations to come.

Randy Ottinger has spent more than 20 years as a high tech executive for companies including IBM, McCaw Cellular (Claircom), and Captaris. He also served as SVP for Bank of America. Before joining Kotter International, Ottinger founded LMR Advisors, which provides business and leadership advisory services to legacy business leaders. He is the author of Beyond Success: Building a Personal, Financial and Philanthropic Legacy (McGraw Hill in 2008), and has written numerous papers and articles on leadership, strategy acceleration, family wealth, and social enterprise.

Read: https://www.goodreads.com/shelf/show/legacy-and-succession

Read: https://fullertonchamber.com/member-events-and-news/succession-planning-for-businesses-leaving-your-legacy-6747

Read: https://visionroom.com/tag/randy-ottinger/