How Servco Prepares the Next Generation of Leaders

Two long-time executives explain their multi-year succession strategy, as they prepare to exit on Oct. 1.

Illustration: Fahmi Ruddin Hidayat/iStock / Getty Images Plus via Getty Images

If HBO’s popular series “Succession” has taught us anything, it’s that poorly planned leadership transitions are riddled with drama and risk. These decisions can be daunting, and its impacts can be all-encompassing. Every business, regardless of industry or organizational structure, needs a succession plan.

Succession planning is a proactive approach to cultivating a pool of talented individuals, identifying potential for growth and developing action plans for organizational change. This should start two to three years ahead of change at any level of the business, not just among executives. It is a crucial part of ensuring continuity and maintaining revenue.

As we prepare to step down from our leadership roles at Servco, our succession planning will allow for a smooth transition. We are confident that the company’s next generation of leadership is well-equipped to continue to build on Servco’s success.

Based on this experience, here are our recommended steps for preparing and implementing a smooth succession plan.

1. Determine Decision-Makers

Identify decision-makers and engage them early in the succession planning process to ensure the plan aligns with their needs and goals. Objectivity is important to eliminate emotional or relationship-based biases, often found in family businesses.

2. Identify Key Positions

Think critically about the current structure of your teams and how that compares to your aspirational strategic needs. Understanding what the key positions are, the duties performed in those positions, the skills needed to fill them, and the functions of those roles in three to five years will help provide an outline of potential successors.

3. Assess Your Talent

This is not only an objective and critical review of existing talent, it’s also about creating and examining key tests of that talent. We found psychological assessments, such as personality tests and leadership style assessments, very helpful. Based on your findings, you may want to consider doing a full search with both external and internal talent. In Servco’s case, we concluded that we had strong internal candidates.

4. Refine and Adapt

Ideally, succession planning should be an annual topic reviewed by both executive management and the board of directors. It’s important to start early and continuously reevaluate your succession plan to evolve with your company. There may be unforeseen situations and changes along the way, so be prepared for the unexpected.

Peter Dames becomes the company’s President and CEO on Oct. 1. Fukunaga will transition to executive chair of the board. On the same day, Ching will retire as president and COO but remain a director of Servco’s Global Mobility Board.

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