On the one hand, there’s Jack Ma announcing that he will step downOpens a new window as executive chairman of Chinese e-commerce giant Alibaba in a year’s time. On the other, following the just-publicized raft of sexual misconduct allegations, there’s Les Moonves bowing out in disgraceOpens a new window last week as chief executive of CBS.
Tesla, meanwhile, last week lost its heads of HR and Accounting – with its controversial CEO, Elon Musk, already under fire on multiple fronts – amid murmurs that the leader of Verizon Communications’s media and advertising business is also in talks to leave.
Regardless of the how’s or why’s of these situations, the HR departments at all of these companies will be asking themselves some variation of a very obvious question: “What now?â€
Admittedly, the situations are extremely different – not only in their abruptness but also in the back-story of each one. As a result of the individual character involved, some of these departures will be more unceremonious than others.
Ultimately, though, from an HR perspective, situations are actually similar at Alibaba, CBS, Tesla and Verizon, as the organizations’ respective HR leadership assess how best to handle the resignations of key executives.
Define a succession plan
Executives and senior managers generally have a level of knowledge and expertise that has been developed over time. Consequently, when individuals in these roles depart, the company isn’t just losing someone who makes executive decisions. The resulting knowledge gap can be significant, and can affect the culture of a team, department or even the entire company.
Consider your own bosses: To what extent are your team’s or company’s strategies, systems and processes defined by those individuals’ preferences and styles?
Indeed, a robust succession plan for the top positions at a company can mark the difference between operations falling into disarray or emerging still stronger when a key manager leaves. It can be the pivotal aspect that defines whether the loss and change in leadership will be like when Apple’s Tim Cook replaced Steve Jobs, or when Uber pushed out and replaced CEO and founder Travis Kalanick, which to a degree has helped bring the company back from a considerable degree of disrepute.
While impossible to design a one-size-fits-all succession plan, defining key processes for a transition in leadership should ensure stability and sustainability. As and when the plan is needed, HR can decide how much is applicable to a specific case.
Of course, some situations can’t be planned for. One such example: No succession plan in the world could have prepared Papa John’s for the chain of events that preceded and followed the forced resignation of company founder John SchnatterOpens a new window as CEO and board chairman.
Nevertheless, having strategies in place that keep operations running smoothly will also (in most cases) demonstrate a sense of control to staff.
Crucially, your succession plan should cover, for example:
- The executives, managers and teams that will take over specific responsibilities during the replacement process.
- How a replacement will be found and onboarded. This can include lists of potential hires within and outside the company, as well as the best process for deciding who will be the best fit.
- The communication strategy for keeping staff and other stakeholders (e.g. shareholders) informed.
- The communication strategy for the press and public.
Naturally, depending on the organizational level of the departing executive – and the nature of the resignation – the above processes can vary significantly.
At the end of the day, however, careful planning and preparation matter most. Organizations with dynamic succession plans will be in the best position possible to manage the changes triggered by a change at the top.
Don’t forget about the rest of the company
Finding replacements for senior roles can take time, particularly if the resignation is sudden and if the position is near the top of the organization.
Considering that the recruitment cycle for a senior executive takes on average four to six months, HR must do everything it can to ensure continuity in the daily business operations until a new incumbent can be brought on.
After all, the show must go on.
As such, company morale must be kept high, and maintaining open lines of communication is the best way to achieve it. Keeping staff current on the decision-making process will contribute to employees having a sense of place in the company, and helping to keep them invested in its success.
Moreover, being honest and clear with staff will prevent rumors from spreading – critical during a transition period. Make sure they understand that while the change may be unavoidable, there is a defined plan in place to pilot the company successfully through the momentary instability.
On that note, it’s equally important that as soon as possible, everyone should be informed of the new plan. Order and stability are critical.
Indeed, communication management goes a long way to ensuring that the company’s many stakeholders – investors, employees, customers, and board members – are adequately informed in order to ensure their continued support during such a critical juncture.