With baby boomers retiring at a rate of 10,000 per day until 2029, there are many business leaders who will be transitioning out of businesses. One study suggests that there will be $10 Trillion worth of businesses that will transfer ownership over the next decade, and unfortunately, many organizations are failing to do proper succession planning to protect their business and ensure a good transfer of leadership.

Our team has had the privilege of walking several businesses through major leadership transitions, including family owned businesses. Here are seven tips for successful succession planning.

Plan Early

Too often, organizations wait to start planning only when a key leader actually decides to move on or leadership transitions unexpectedly when a health issue arises or when they get another opportunity. This limits options and creates a quick reaction of uncertainty.

Share the Story

It is important to carefully map out the announcement for a key leadership transition right down the hour. Consider how you will tell employees, other leaders, customers, and the general public. Announcements should be very clear and you should give employees an opportunity to ask questions. Uncertainty or a lack of information will cause people to fill in the gaps with their own stories which are often much worse than reality.

Develop the Next Leaders

Identify candidates to become the next generation of key leaders and work on developing their abilities. This should be a constant process anyway as the development will help to engage and retain your best people. This development should include exposure to all areas of the business as well as good management and leadership skills.

Have a Plan B

Many succession plans focus on specific people taking specific roles. This creates a challenge when things don’t work out as planned. Your succession planning should work to constantly develop multiple people for key positions. As someone gets close to taking over, you should have regular conversations with the person to establish mutual expectations. We’ve seen several times when businesses and individuals make poor assumptions about the timing and nature of a leadership transition. These assumptions can create misunderstandings and havoc.

Don’t Replace, Succeed

The new leader will not be like the old leader, so don’t pretend that things won’t change. Pretending things will be the same will put undue pressure on the leader and the team. Instead, identify and embrace the changes while also identifying the things that really shouldn’t change.

Strengthen your Culture

Leadership changes create an opportunity to shore up weaker areas of your culture. Upgrade systems that support a strong culture including hiring, onboarding, role definition, communication, meetings, management, management check-ins, strategic planning, and goal setting. Your leadership transition will give you a great opportunity to make improvements and these improvements will also help to ensure a good transition.

Build a Trusted Team around the New Leadership

The new leader will need be surrounded by trusted advisors. These advisors might come from within the organization, or they might come from the outside. Good advisors are not afraid to tell the leader things they need to hear even when it is difficult. Some top leaders even form advisory boards that meet quarterly to help with issues as they arise.

Succession planning is incredibly challenging for a business. Many leadership transitions create situations where businesses decline or even fail. Start planning ahead and avoid leaving a negative legacy to the next generation.