It can be hard to let go. Whether it’s your own business, or you’ve been entrusted with the responsibility of leading a business, you invest time, energy and so much more to ensure its success. When it’s time to move on, you want to not only make sure the impact of all your hard work carries on after you leave, but also that the transition in leadership is as seamless as possible for all stakeholders involved.
At First Bank, succession planning and succession planning best practices are our areas of expertise. With four generations of independent, single-family ownership, we uniquely understand the importance of a smooth transition to ensure the continued viability of any business.
We recently had our own transition in leadership. In September 2018, our previous Chief Executive Officer Tim Lathe announced his upcoming retirement. After careful consideration, it was determined to transition Shelley Seifert, President, FB Corporation, to take the helm as CEO. In May of 2019, Shelley Seifert took the reins of leadership and became our first-ever female CEO. During this period of change, we’ve leaned on our 100-plus years of experience to help ensure the important transition in our leadership was a success.
Shelley Seifert, Chairman and
CEO of First Bank with
Michael Dierberg, Chairman of
the Board, FB Corporation
Below are four key considerations to help businesses ensure a seamless transition of their own.
Leadership must demonstrate there is an openness and willingness to communicate with employees. A transition brings with it a lot of questions, and employees need to be given the opportunity to understand what changes they can expect from new leadership. In order to make its transition as transparent as possible, First Bank conducted a series of intimate town halls with both Seifert and Lathe in which they met with individual employees face-to-face and took time to address their concerns. Sessions were designed with small groups to encourage employees to actively participate and to ensure everyone had a chance to make their voice heard. During these sessions, First Bank made a point to outline the philosophical and strategic positions of both the outgoing and incoming CEO, and explain what, if any, changes employees can expect. Having an open, honest dialogue with employees helped them feel better prepared to transition along with leadership. This same level of transparency should apply to clients. Make time to meet with clients independently to allay their concerns and address their questions as well.
A strong partnership between the new and outgoing leader is critical to an effective transition. The relationship between the two sets the foundation for new management. The incoming leader must be prepared to take control of the company and understand the corporate culture, organizational politics and internal decision-making process. The outgoing leader is best equipped to provide this support as well as gain organizational buy in for his or her successor. The absence of a symbiotic relationship between leaders can create fear of change and lead to a hostile view of new leadership within the organization. Prior to the announcement of the CEO transition, First Bank had experienced a period of change, rolling out a renewed strategic plan in 2014, which was again refreshed in 2017. It was important to demonstrate to employees that the company would remain stable under new leadership. The positive relationship and mutual respect between the previous CEO and Seifert instilled that confidence across the organization. Although there won’t always be a well-established relationship between the incoming and outgoing CEO like in First Bank’s case, the outgoing CEO must be invested in the transition and set an example for employees by supporting the internal or external candidate throughout the process.
With change also comes opportunity. A leadership transition offers the chance to address issues within the organization that may have been overlooked and an opportunity to demonstrate commitment to employees’ interests and concerns. It’s also another way to make employees feel that they are a part of the transition. First Bank leveraged change communication to solicit feedback from their employees on ways to improve the business. The town halls were conducted in a roundtable format to create a more open setting and encourage employees to be honest and forthcoming. First Bank executives, including both the incoming and outgoing CEOs, asked how management can address their concerns, not just about the transition, but also about day-to-day operations. Following these meetings, the First Bank management team compiled a list of issues and assigned them out to responsible internal parties. In those coming weeks, the groups presented their plans to address the issues, and employees received timely follow up communications on progress. First Bank executed two key components to feedback–creating a comfortable, open environment and demonstrating a commitment to action. If employees feel intimidated or fear retaliation, they are less likely to come forward with issues. In addition, if they doubt management’s ability to act, they lack incentive to participate. In First Bank’s case, management designed an open forum and developed a set of action items to hold themselves accountable.
To read more about establishing a strong family-owned business culture, read Family-Owned Businesses and Strong Cultures Can Go Hand-in-Hand.
A transition presents the perfect opportunity for an incoming leader to establish their own unique identity and management style. But it’s equally important for a new leader to establish that identity while ensuring they are not detracting from what the company has worked so hard to establish in the lead-up to this moment. When applicable, a smooth transition requires solidarity in staying true to the company’s already established vision.
Although this doesn’t apply to all businesses, for First Bank’s transition, Seifert and Lathe shared the same commitment and approach to First Bank’s strategic plan, its employees, and its clients. For both, the plan for First Bank’s continued growth lies in adhering to a strategic vision focused on becoming THE bank for family-owned and privately-held businesses that they, along with First Bank’s employees, created and have been successfully enacting over the past few years.
Whether incoming leadership is in complete lockstep with outgoing leadership or not, in most instances businesses should consider implementing changes in gradual shifts rather than making any sudden, sweeping departures from the norm. What’s going to change is equally as important as what will remain the same.
For assistance with your succession planning and to discuss any family business succession challenges, please contact First Bank Wealth Management.