The Stranberg 3x3 CEO Succession Planning Process for Family Businesses
For family-owned and founder-led businesses, planning for and establishing the next generation of leadership is a momentous – and often emotionally fraught – process.
It isn’t uncommon for family members to have aspirations that stand at odds with what’s best for the business and family – and, by extension, the employees and community that support them. While it may be tempting to allow wants to win out over needs, doing so can damage multiple legacies, livelihoods and reputations.
Because leadership transitions are bigger than any one person or family unit, it’s important to approach CEO succession planning strategically – and to prioritize qualifications over familial bonds.
If your family business is beginning to think about a leadership transition or believes it’s ready to hand over the reins, Stranberg can help ensure the right leader is chosen. Our 3x3 approach to CEO succession planning is built on three core principles and executed through three strategic steps. This proven process will help you navigate the complexities of succession planning – and result in a placement that will allow your business to thrive for years to come.
The Importance of Getting C-Suite Hiring Right the First Time
The right leader can catapult your organization to new heights – but the wrong one can set your business back for years. Unfortunately, transitioning power is rarely a straightforward endeavor – regardless of whether the placement comes from within the family ecosystem or outside of it.
Whether you, like many, hope to keep leadership within the family or have underqualified next gens waiting in the wings, transitioning power to a family member without doing your due diligence can harm your organization financially and reputationally, lead to key employee turnover, disrupt day-to-day operations, and threaten the well-being of your employees and customers.
Similar risks exist when external hires are hastily appointed or if members of your family can’t align on a shared vision of the future.
Are You Ready to Hire?
Find out if you’re ready to hire a family or non-family executive to fill your open CEO or other leadership role by completing our free, online succession planning assessment.
Completing the assessment will help you clarify the requirements, goals and success factors before you embark on an executive search and hiring process.
Avoiding those pitfalls requires intentional, strategic family business CEO succession planning – which is where Stranberg excels. Instead of rushing to determine who will fill your open leadership role, we first collaborate with your family to learn what your business needs from its executive team by assessing what’s working and what’s needed, and defining the role, goals and responsibilities of the position to be filled.
This approach keeps the focus on what is best for the business – rather than on the personal hopes and aspirations of family members or current executives.
The Process: 3 Principles, 3 Steps, 1 Leader that Lasts
The Stranberg 3x3 CEO succession planning process is grounded in a simple yet powerful observation: because so many people depend on your organization’s continued success, it is in everyone’s best interest that the most qualified executive is selected for the role. In this case, “qualifications” include but also extend far beyond credentials and abilities: they are deeply rooted in the strategic long-term needs of your business.
Principles
Because so many people depend on your organization’s continued success, it is in everyone’s best interest that the most qualified executive is selected for the role.
Steps
01
The CEO Must Demonstrate They Are Qualified for Their Role
The CEO should possess the necessary skills and experience to lead the business effectively
01
Establish Family Shareholder Alignment on Business Strategy
We begin by aligning family stakeholders on the strategic direction of the business, ensuring everyone shares a common vision and goals
02
Qualifications Are Derived from Strategy
The required qualifications for the CEO are directly informed by the company’s strategic direction
02
Derive CEO Qualifications and Position Description from Strategic Alignment
03
Strategy Is Determined by the Vision & Values of Family Ownership
The business strategy should reflect the vision and values of the family owners, ensuring alignment with long-term goals
Based on this strategic alignment, we define the specific qualifications and create a detailed position description for the CEO role
03
Measure CEO Candidates Against the Qualifications
Any candidate considered for the CEO role is rigorously evaluated against these predefined qualifications, ensuring they are the best fit for the business
How to Get Started
Stranberg’s CEO succession planning service sets the stage for our executive search process. Regardless of whether your ideal candidate comes from within the family or outside of it, we identify and help you vet the most qualified candidates and streamline the inboarding/onboarding process.
Contact a Stranberg succession planning expert to learn how our approach can help ensure you’re ready to hire a successor and retain them over the long term.
