Q007
How do you tailor
a plan to your org?
our take .
To know the needs and capacities of your organization, you’ve got to understand how well your organization handles change. And to know that, you’ve got to understand the where, why, and how of trust in your business. Specifically:
At what pace can the organization handle change?
Given the magnitude of the changes inherent in succession events, are sequential small steps better or one major shift?
What does the organization need that it doesn’t have? Does everyone know you don’t have it? Who would disagree and why?
Who are the key people in your organization (regardless of title)? How do they view the future of the organization?
Who do others look up to who might be willing to champion positive change? What does that role look like?
How does this relate to succession planning and finding the next captain of the ship? If you understand how trust flows throughout your organization – who’s trusted, what that means in terms of the business’s ability to change, and what you’re willing to lose to move in the direction your company needs – you can craft a bespoke succession plan.
In general, teams don’t do well with radical shifts after long periods of seemingly very little change. If nothing has changed in 10 years, something changing out of the blue feels chaotic. This is yet another reason to promote a culture of continuous improvement, so that small changes are consistently being implemented and the feedback loops build understanding that change is not inherently bad.
on paper.
case study: JCPenney
The background: In 2011, facing declining sales and growing competition from online retailers, JCPenney decided it needed fresh leadership to modernize its brand and regain its market share. The board recruited Ron Johnson, a well-regarded executive from Apple who had spearheaded the creation of Apple’s highly successful retail stores. The plan was for Johnson to apply his innovative, tech-forward retail expertise to rejuvenate the century-old retail chain. Think a modern, stylish brand to capture a younger demographic while moving away from the discount-driven, middle-market approach.
The hiccup: Johnson’s strategy, however, didn’t align with JC Penney’s core customer base or its operational capabilities. Turns out that the discount programs were popular, the traditional best-sellers were traditional best-sellers for a reason, and JC Penney customers didn’t want to feel like they were shopping in an Apple store. Plus, these changes were executed swiftly, without much regard for JC Penney’s infrastructure, long-standing customer loyalty, or the store’s brand identity.
The fallout: The results were disastrous. The sudden shift alienated JC Penney’s core customers – largely value-oriented, middle-income shoppers. Sales plummeted by 25% in the first year of Johnson’s tenure, and customer traffic dropped sharply. The company’s financials deteriorated, with losses reaching $1 billion by 2013. By the time Johnson was ousted just 17 months into his role, JC Penney’s stock price had nosedived, and the company was forced to try to reverse Johnson’s decisions.
Analysis: Bringing in a visionary leader is one thing, but if a plan fails to consider the scale, needs, and unique customer base of the company and adopts a "one-size-fits-all" solution, there’s gonna be trouble.
Works Consulted:
JCPenney Board Plays Russian Roulette Succession
A Lesson From the Big Reorganization at JC Penney: Change Can’t be Rushed
character to consider: Willy Wonka
Knowing your org
Listen, we’re not putting forward Willy Wonka as a perfect succession planner. There are some serious questions to be addressed regarding the safety practices in place at the chocolate factory, let alone the leaving of determining succession candidates to chance or the setting of literal death-traps for his potential successors-to-be. But if there’s one thing Wonka knows, it’s the needs of his organization and what both he and the Oompa Loompas wanted in a leader. Willy Wonka’s Chocolate Factory required a specific type of leader – which meant a specific type of process to identify a successor and effect a transition. That meant, first and foremost, a competitive process in which Wonka could interact with and test his potential heirs. And not only test them, but test them on the character flaws most likely to tank the business (hello entitlement, greed, gluttony, vainglory…)
Recreating the unrecreatable
When Wonka Wonka-s into a new product (or, frankly, way of being in the world), the process by which it happens is baffling, ineffable, effortless, and unrecreatable. That’s how you know you’re in the presence of tacit knowledge. The fact that his Chocolate Factory relies on tacit knowledge and a cult of personality around Wonka as founder is bad news for finding a fitting heir. And so, Wonka goes looking for someone to train. Tacit knowledge, as explained in a series on the subject, is “knowledge that cannot be captured through words alone.” It’s helpfully explained as when someone with expertise tells you to:
Do X. Except when you see Y, then do Z, because A. And if you see B, then do P. But if you see A and C but not B, then do Q, because reason D. And then there are weird situations where you do Z but then see thing C emerge, then you should switch to Q.
We’ve probably all found ourselves at one time or another on each side of that conversation, and what the piece ultimately concludes is that to transmit and receive this type of expertise requires long-term apprenticeship and frequent post-mortems. Note Wonka’s early start to succession planning, his thorough (if reckless) testing of potential successors, and his identification and mentorship of Charlie Buckets.
Works consulted:
More Succession Topics→
←Q006 When do you (or do you) tell your people?
Q008 How do you get someone ready to step up?→
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