Effective succession plans involve a combination of many choices and decisions that are distinctive to each, specific company. Bioscience companies also present their own, unique challenges, as I have learned with my 28 years of leadership experience as a U.S. Marine Officer, Foreign Service Officer, founder of a medium sized European consultancy company, and bioscience recruiter.
The first crucial point I’d like to clarify when it comes to succession plans is that a solid plan does not center solely on the president and founder of the company. There are many other, key issues to consider and address. Unfortunately, too many succession plans do fall into this trap and focus only on this one question. A strong succession plan will focus on the entire company. A succession plan for the president and founder undoubtedly needs to be addressed, but uniquely and for each, different scenario.
It may also surprise some that I feel a good succession plans begins with a company’s target market and not on the structure of the organization (although structure is very important, and I will address that next). I base this on my belief that a strong succession plan is part of a company that understands that the market is more important than the structure of the company itself. What do I mean by this? To me, I find that a solid succession plan focuses on the products or services that the market demands, and this will tailor the other needs of the company accordingly.
A successful company exists to service the market. While this fact is well known, and has been highlighted by great thinkers like Peter Drucker who reminds us that “”The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself,“ it can easily be forgotten, as a company reaches a certain size. As organizations grow, the focus often tends to become more “internal” — on structure, internal policy, personnel issues, and the like. At this stage, businesses often forget and focus less on the reason the company exists in the first place, which is to service an outside need, and to do this as best they can.
Some organizations are able to handle change better than others. This was evident to me with the Marine Corps when I served as an Officer in the 1980’s. The Marines never lost sight of their ultimate goal—an effective combat organization in a changing world–and utilized the best skill sets and technology available to achieve it. However, when I was employed with the State Department, I saw that the organization did not understand how to adapt in a changing world. I found this institution struggled with many issues, one being the rapid growth and importance of the Internet, and was not able to define a core function.
How does focusing on the target market relate to good succession planning? A company which does not understand the reason it exists – what service it provides to its market – cannot possibly comprehend which staff positions are essential. For example, a drug company subsists to provide drugs to the marketplace. As such, it needs to understand the patent cycle of its major products. If many of its products’ patents expire around the same time, the company will need to spend a lot of additional time and resources in research and development of new products far in advance of the expiration dates. It’s therefore critical to understand the key skill sets involved in creating these new products, which brings us back to the company’s succession plan. Will the business lose some of its key members to retirement? Does it have the right scientific skills and technology to develop these new products? These are some of the key questions to ask.
A good succession plan also involves having a solid understanding of the intricate needs of the current and future structure of the company. Businesses require different types of organization depending on their revenue model. A company that grows past a certain threshold of revenue, for instance, will require different skill sets from its employees and need more experienced leaders. A good succession plan will include this important concept.
A related example is a succession plan that includes a strategy for when the business needs to have certain Human Resource functions internal to the company. If the company anticipates growing to this point, and has a general idea of when that point might be, it can create a plan for internally grooming the right individual to take on that position at the appropriate time.
A solid succession plan will also take into account the various skill sets available to and required for the business to be successful. Employee talent and technical skill sets are required to produce quality products or services and determine the overall success of the company. The plan should estimate the training, experience, and skill sets required for each function. It should be dictate where or how these skill sets can be acquired, and it should include a logical career progression in the market for each position. The plan needs to additionally include the market value of each skill set and any potential shortages that may exist. For example, good bioscience companies know that bioinformatics individuals are in high demand by companies outside bioscience, and therefore, they must plan for this accordingly.
When I was a Foreign Service officer in the 1990’s, I repeatedly sought and dealt with this complicated issue of skills set issues in succession plans. Given that most State Department employees are spread across the globe, in many different countries, our government must assess both the experience and language skills in potential staff replacements. For instance, an experienced political officer who speaks fluent German cannot be successfully transferred to Turkey to run the Political Section without the proper training in the Turkish language and culture. Dealing with such complicated, personnel issues required advanced planning for both language training and required experiences. The key is to understand your variables, what you can control, and work around what is outside of your scope.
In addition, a strategic succession plan will include several levels of staff promotion opportunities, and in particular, prepare for the next two or three levels of promotion for each key skill set within the company. This would include plans for employee training to gain the skills needed for individual advancement. The plan should also project potential deficits in staff numbers caused by retirements, attrition, or other events typically beyond the control of the business.
The military has a great track record of dealing with succession planning. Their leaders comprehend the background knowledge of their senior officers, and they strive to ensure the more junior officers receive similar experiences for a smooth advancement. However, this process can be much more complicated than one might think. Marine officers, for example, spend less than half of their careers in combat units. The rest of their years are spent in various schools where they receive the necessary training, on recruiting duty, or participating in other essential functions. How does one value all their military assignments while also preparing effective combat leaders? It’s a challenge.
Further complicating the issue is the fact that officers and enlisted leaders spend their line tours performing several different functions within the same unit. As a staff advisor to a senior officer, I spent an entire year focusing on this very issue, moving officers around to varying roles to give them the experience they needed to advance to positions of greater responsibility. When an officer is additionally dealing with the fundamental fact that the military mission of the unit simultaneously needs to be accomplished, it is extremely demanding. It becomes a challenging, balancing act for this key part of succession planning. Good judgment in balancing organizational priorities with resources comes from years of experience dealing with the issue.
I have seen this balancing act successfully applied in the corporate world and in the bioscience sector. Well led companies understand this balance. It is the reason such businesses can exist and thrive long-term, supporting the needs of individuals who will rise in the organization. I also believe the right external expert, who has years of experience dealing with leadership challenges, can aide companies with the issue. He or she can correctly guide an organization and company to create a strong succession plan, without endangering revenue.
As I have hopefully demonstrated above, I believe good succession plans involve several key elements, which must not be overlooked. In addition to considering the succession of a Founder and President, a company must also focus on the goals of serving its market; plan for the needs of the current and future structure of the company, particularly with company growth and changing markets; take into account the various skill sets available to and required for the business to be successful; and arrange for staff advancement for the next two or three levels of promotion for each key skill set within the company. Due to the complexity of succession planning, I highly recommend companies consider involving an expert in the field to aide them in accomplishing this often complex and challenging task.