Succession planning: Map out exit strategy

A. You don't want to wait until a referral source asks the inevitable question of when you are going to retire. In small to medium sized companies, clients often associate their experience with the CEO. Especially when the CEO is the founder, it is realistic to expect a referral source to want to know about any upcoming plans to switch leaders at the top.

Ensure that the core management group of your company is aligned with your plans before unveiling them to the outside community. How is the new CEO, for instance, going to preside over the core values and mission of the company or will they develop their own?

The next step is to determine the pace at which the CEO will relinquish managerial duties and responsibilities. This will entail a listing of each duty and the appropriate delegation of those duties to senior leaders. This should also include a timeline and a plan for how the new leaders will transition to their new responsibilities. For some CEOs, a slow release of ownership is the best way to bow out. For others, a swift exit, once mapped out, is their preferred method to exit the business. Retention of employees is also a key concern in making the transition a smooth one.

Timing wise, it is best to begin introducing your new leaders within a year of the time of the CEO's departure. If you prefer a longer, more gradual exit strategy, be sure to explain who will begin to take over which roles and when so that there is no question or confusion amongst the referral sources.

All in all, the CEO's exit strategy is just as important as the decision to exit. A clear and concise plan of how and when to tell internal staff and external community will assure everyone involved that the transition will not only be smooth, but the new leaders are set up for success.