The Supper Club - Logo

The secrets of a successful succession

Putting in place a plan for someone to take over the running of your business is one of the hardest parts of being a founder. While the idea of stepping back and taking time for yourself sounds great, it’s a stressful moment. Or rather, it’s lots of stressful moments. Just ask Logan Roy. He’s taken three seasons of the hit TV show Succession and still hasn’t made his mind up. At its heart, the story of Roy’s struggles to settle on a successor is one that resonates with many founders.

Last week, Supper Club members enjoyed a session in which two founders who have managed to step back, shared their stories. Ian Harris, founder of Search Laboratory and Ally Maughan, founder of People Puzzles, have both managed to successfully make the transition from the day-to-day running of a business as CEO, to a more removed, advisory role as Executive Chair.

Both have successfully dealt with the chief challenges founders at this point in their journey face, namely concerns about what might happen to themselves and their business once they take a step back. Having built flourishing businesses with thriving cultures, both questioned whether it would be possible for things to survive and thrive without them.

Ian Harris set up Search Laboratory in 2005. After 10 years of successful growth, and having built a company around a distinctive culture, he had started to think about finding someone to replace him. He wanted a change in his daily routine and was starting to look to do something else. His chief concerns were how the business would operate without him driving growth and keeping the culture alive and whether, even after stepping back, he would ever allow himself to “clock off early”.

Ally Maughan started People Puzzles by working as a freelance HR consultant. The business gradually grew and expanded. A nasty illness in her family meant she had to nurse a loved one and therefore needed to step back from the business for a while. She subsequently had a baby and had to therefore step away again. On both occasions the success of the business while she wasn’t so hands-on, proved it was feasible.

Ian and Ally took different routes to find a successor. Ian found his replacement from within his existing senior team, where he says there was a clear, standout candidate. Ally found a replacement from outside, but introduced him to the company as an “MD in waiting”, with an initial spell as operations director to smooth the transition.

While identifying the right candidate to step into your shoes is tough, both Ian and Ally were confident that they had done all they could to make sure the succession went smoothly. Some of their combined top tips are:

Appoint an internal candidate where possible. They should be more likely to understand the existing culture and cause less of an upset when they takeover. Sound out suitable candidates discreetly and early on and think carefully about the impact on those not selected. Having made a decision, tackle any awkward conversations early and in-person and before news reaches them through any other channel. Think about successors when you are recruiting and appointing your senior team.

If you go for an external replacement, take extra care on their induction. While every employee’s induction is crucial to their future success in the business, there is extra care needed here. Make sure you allow enough of your time in the early stages to conduct as full a handover as possible.

Consider starting someone in the business as "MD in waiting". Commercial director, chief operating officer, chief of staff or ops director are all good roles for someone to join as a step on the way to taking over from you. But set clear goals and deadlines and, having made the decision to bring someone on board on this basis, make sure you stick to your promises.

Take your time and be prepared for it to take longer than expected. It is just one of those key moments that often take longer than you’d like. Having imagined yourself in a new life (with fewer days at work) make sure you don’t drift away from the day to day too much before the new person in on board and fully up-to-speed. Start thinking about the process before you are ready to go if you think you might get impatient.

If you stay in the business in a new role, be clear what that role is. Even if you can’t define precisely what you do around the place, it is essential that there are clear lines of responsibility and accountability. If people look to you for the big calls, make sure you point them in the direction of your successor.

Let your successor make mistakes. Obviously, you were perfect when you ran the business. But no one else will be. Accept this and allow your successor to make some big calls and potentially make the odd mistake. Hopefully they will be as rare and small as the ones you occasionally made!

Relax and enjoy the time you free up. After a long time working hard to build a business it can feel wrong not to be at the coal face every day. Founders’ guilt is a familiar feeling that lots of people who have sold or just stepped back feel. Don't feel guilty, you have worked hard and deserve the freedom you can now enjoy.