In almost every industry, a leadership transition is a crucial moment in a company’s life and can drastically impact its future. Leaders in the construction industry planning their exit face even more pressure because an estimated 54% of construction managers are baby boomers.
So how, as an industry, do we ensure that those who are retiring or leaving the company aren’t walking off the job site without transferring their institutional knowledge and key relationships? As I prepare to take over the helm of JTM Construction, I’ve determined some important lessons that play an integral role in a seamless leadership transition.
- Plan early. A thoughtful and effective executive transition starts early with redistributing roles and responsibilities amongst the leadership team. At JTM, for example, we began planning for a leadership transition a few years ago. We thought through every detail, like revising our company organization chart, expanding our leadership team to seven individuals to handle our company’s accelerated growth, and clarifying roles and responsibilities with each member. It’s also essential to communicate the plan with all employees to build alignment and include them in the transition process. After all, developing the next generation of leaders happens intentionally through a focus on continual growth of individuals as well as the company.
- Collaborate on changes. Employees are more invested, motivated, and engaged in a company when open and honest communication and information sharing happens. This is particularly important because engaged employees are the best predictor for increased productivity, creativity, and profitability. Collaboration helps foster a strong sense of team, family, and camaraderie. This is especially true in succession planning. By collaborating with our team and involving them throughout the leadership planning process we created a unified vision. Not only does this demonstrate to employees that their voice matters but reaffirms that they are a vital part of the future of the company.
- Maintain transparency. Throughout the leadership transition process, maintaining transparency is critical. When JTM began succession planning a few years ago, it was no secret to our employees. Attempting to keep something this important hidden never works, divides the company, and always harms employee morale. Being transparent, open, and honest reinforces company values and promotes relatedness and trust in the leadership transition process.
- Respect and involve the past leader. Severing the relationship with the previous company leader may seem like the logical move, but ultimately it can end up being a disadvantage for both parties. In JTM’s case, we were eager for our original president, John Hayduk, to continue his role as chair of the board and act as a senior advisor. He is well respected by the entire company and industry, and has invaluable connections. John’s ongoing mentorship also made my transition to President that much more seamless.
- Bring outside perspective. It’s difficult for any company to balance working in the business versus working on the business. Hiring a trained professional, like a business coach, adds greater insight and a non-biased perspective. Whether it’s a short- or long-term relationship, the impact is substantial because it keeps leadership accountable and puts the company first.
The construction industry is ever-changing, but it has always shown resilience and adapted to change. Creating a robust succession plan not only makes the leadership transition harmonious but gives the next generation a road map to follow. As current leadership, we must ensure company culture, values, and succession plans are established so the next generation can focus on what they do best– being changemakers.