From Plan to Practice | The Honest Conversations Behind Real Succession Planning

Joey: Welcome back to another conversation about succession planning. I’m Joey McCoy, and I’m back with Fran San Diego, Jennifer Rebis, and Nicole Devine. Welcome back, everyone. 

Nicole: Welcome back. Thank you. 

Fran: Good to be back. 

Jennifer: Glad to be here. 

Chapter 1: From Plan to Practice 

Joey: Just to recap for listeners who didn’t get a chance to hear our last episode about succession planning, can you all give us a thirty second overview of what you see when organizations move from having a succession plan in principle to actually having one in practice? Fran, why don’t you start. 

Fran: What we talked about last time is really the most important thing we need to see in our client organizations, and it’s the same thing we have lived here personally. It’s the act of planning and then moving from identifying the critical roles in the organization to an actionable plan to move ahead. 

Joey: Jennifer? 

Jennifer: To move beyond just the principle of succession planning, we have to start embedding it in the architecture of financial planning. So when we are budgeting and forecasting, succession planning needs to be part of that exercise every year. The costs that go into it, things like professional development, additional training, possibly hiring additional staff, those need to be in the model. It’s getting into the details a little bit more at this stage. 

Joey: Nicole? 

Nicole: From this point, it’s about getting out of theory and out of the framework or design phase and into actual implementation. The shift from designing the framework to executing it requires transparency about how all the pieces and parts will look in real time. That transparency can look different at different levels, but the reality is that you are setting your teams up for success and also giving the team grace as you iterate. Part of execution is the agility and the grace to get things right as you mobilize. 

Chapter 2: The Conversations That Are Hard to Have 

Joey: Nicole, what conversations do you find the hardest to have about succession planning, and what’s the best way to help an organization approach those conversations? 

Nicole: The hardest conversations are at the executive level, because they are about role clarity and design. When we walk into clients, the operating system that got them to where they are is often not the one that the next generation of the company will need. So the role design is about iteration. We are not looking for another CEO who is identical to the one in place, or another manager who owns the same set of relationships. We are looking for the next round, because the model is moving in real time and the organization may be shifting into another growth phase. 

Nicole: We work a lot with clients on what we would call shadow alignment. In the room, everyone says the same thing, but when we leave the room, people are having different conversations. The hardest conversations for me are at the top, getting honest about what the next round looks like and what good looks like, and then setting the teams up to have hard conversations with people who have been with the organization for a long time, but whose skill set is not the one that will be needed in the next round. 

Joey: How do you have a conversation with somebody who has given years to the organization and expects to be next in line and may or may not be? 

Nicole: That is a very personal question to the actual client, because it aligns to culture, and trust does not happen overnight. A lot of our clients have made sure that their leadership teams are trusted by their teams. If that trust is in place, the conversation is a lot easier, because people trust that leadership has their best interest at heart. It is not to say there is no place for them in the organization or that they have no value. It is just that their value may be seated somewhere else within the company. Setting them up for success of, this may look different in the next round, but it does not mean there is no place for you, that is the work. 

Joey: Fran, as someone who has navigated this before as a CEO, what’s the best way to coach a leader through this? 

Fran: It really starts with leadership and understanding where the organization is headed, the vision, and the strategy. We are seeing this in the marketplace in real time. AI is shifting how we all look at our organizations and our business models. The CPA and advisory space where we sit is evolving, and our model is evolving. 

Fran: So it’s about getting clarity on what the long term vision needs to look like, understanding the critical roles to be successful in version 2.0, version 3.0, version 4.0 of the organization. Then it’s about understanding everyone’s gifts and where they are in their trajectory, and having a plan moving forward. Sometimes that plan is hard, because we identify folks who have been with us a long time but who may not be ready for version 2.0. The most important thing leaders can do is get clarity, then work with team members on communicating that clarity and the vision for the future. 

Joey: Jennifer, I’m sure there are plenty of hard conversations that come up in succession planning. What can you tell us about those conversations? 

Jennifer: Sometimes clients don’t understand that there is a true cost to succession planning. It’s not just about identifying individuals for the next round. It’s that there is a real cost. If professional development or training is needed, or if the CEO the organization had in mind for the next round isn’t actually ready, or the CFO isn’t ready, the organization may have to bring someone in from the outside, which incurs recruiting fees and other costs. There are all kinds of expenses that have to be addressed. The sooner that work is done, the better, because making sure the organization has the funds to implement its succession plan is one of the biggest hurdles. 

Chapter 3: Readiness vs. Tenure 

Joey: Nicole, sometimes tenure at organizations gets treated as readiness, but that’s not always the case. How does PBO’s approach differ, and what does it look like? 

Nicole: For our teams internally, a lot of it is doing the work at the foundational level so that the architecture is in place. We genuinely want to honor and retain talent, so we focus on creating pathways for mobility, not just paths that move people up. Within our own organization and within our client organizations, we see this often, moving up is not the only option. We need to create lateral moves, internal mobility into different skill sets. 

Nicole: We have a unique situation at PBO where we can move our teams across clients, across industries, and across skill sets. That gives our people a wealth of experience and a wide skill set, and it creates a dynamic where we can have a lot of different conversations about what’s possible because we can build different career paths. So a lot of it is about building a framework with agility inside it. To Jennifer’s point, it’s understanding the costs not as one time but as integrated into how we design our talent and our teams. In an advisory and outsourced services context, we can give our teams a variety of projects, and that variety is a natural byproduct that builds succession ready skill sets for the next round. So tenure is less the focus. The focus is the curation of talent and skills and the exposure that gives people the chance to discover what they like and don’t like. 

Joey: What kind of skills and qualities does PBO assess when evaluating readiness? 

Nicole: This connects to what Fran said about vision. What’s interesting in the advisory space and across professional services right now is how AI is impacting role design. So we look for transferable skill sets we can build on, regardless of how AI or whatever the next wave looks like reshapes the roles. We look for things like client management, critical thinking, curiosity, resourcefulness, and the ability to work through a lot of things happening at once and prioritize and manage margin. Those skills are dynamic and we can deploy them anywhere in the organization. We focus on transferable skills that stand up over time, so that people can move into bigger projects and more complex clients because they have the critical underlying capabilities. 

Joey: And when a gap is identified for somebody who has all the skills except for maybe one, what does development look like for that person, and how do you go about moving forward? 

Nicole: It depends on the role. We are shooting for range, not precision. If somebody is typically eighty percent of the way there, and to be clear this is a two way conversation, one of the biggest misconceptions is that the organization designs the role and brings it to the team member without their input. The most critical component is having a two way conversation about how critical that missing skill is. If it is something that will make or break their success, we don’t want to put someone into a role they will not feel good about performing in. 

Nicole: But we also want to create the runway, a safe space for them to take a shot at it. We’ve demonstrated this well at PBO internally. It also takes real clarity about whether they are even having fun in that role, and whether it is something they truly want to do. Going up is not the only direction. What other variety can we provide that gives them the same value, the same feedback, and the same feeling of growth, even if it is not up? 

Joey: Jennifer, what would you say finance’s role is in assessing readiness? 

Jennifer: Finance can really help the leadership team build financial acumen, things like understanding financial statements, financial modeling, and the inputs into modeling and budgeting. We think of it as an investment in the team and in one of the organization’s largest resources, which is its people. It’s not a one time cost. It’s an ongoing investment in the future. Leadership teams with stronger financial literacy make better decisions, have better board conversations, and produce better organizational quality. Investing in those resources is investing in the long term. 

Joey: What are some of the most common surprises your clients find in their readiness assessments? 

Fran: Joey, we see surprises in both directions. In many of our client assessments, we find leaders who were underestimated. There are people in the organization who, when given the opportunity and the necessary development investment, grow faster than anticipated. There is a version of organizational life where people can only show you what they are currently being asked to do. So when you give them more, sometimes you discover they were already capable of taking it and running with it if they had been given the chance. 

Fran: On the leadership team, we sometimes find that assumptions have been made about people that haven’t actually been tested. When we go in and do talent assessments, skills assessments, and personality profiles, we learn a lot. As outside advisors, our perspective is more open, and we can give clients a deeper, different look. Sometimes we change the appreciation of an individual’s contribution. Sometimes we require the organization to be honest about the assumptions they have held about team members or about what is really required for a job. We dig in to understand what is really needed, what the possibilities are, and what the team is actually capable of. 

Chapter 4: Culture Continuity 

Joey: Nicole, culture can sometimes be a hard thing to assess. How do you recommend approaching culture continuity in this process? 

Nicole: It’s a really good question, and it’s not easy to tackle. Culture assessment is about understanding how much trust there is within the teams and within the leadership team that we are doing the right thing. Whether we pull from an internal candidate or an external one, we have to be really clear on the values we are looking for to drive the next phase, at the leadership level and at any level. Succession is at every level, around mission critical roles. So culture assessment shows up at the team level, the organizational level, and yes, with extra weight at the leadership level. 

Nicole: We make sure we are clear on the value sets of who we’re looking for. We create things like success profiles for mission critical or leadership positions. That helps us understand the who, including what challenges this person might face when they come on board or move into the next role. Sometimes that challenge is, I have been a peer, and now I’m about to be everyone’s boss. What does that look like? Are they the right person to step into that, what skill sets will they need, and will they carry the culture forward? Integrating that into the selection process is important. Culture is something you can’t really train on, you can only be clear about the behaviors you want to see, even when no one is looking. 

Joey: And how do you typically recommend coaching a CEO through the question of culture continuity? 

Fran: First and foremost, strong organizational cultures are built around the values of that organization, and those values are exemplified over time through how we make choices and how we behave with each other. That is the most important point to come back to. That is the shining star. We want to make sure that our thinking is integrated into our values, that we are a customer first organization, that we are transparent with each other in how things work. 

Fran: That integrated philosophy and the way we show up for clients informs our culture and how we show up for each other internally and externally. The belief that our people strategy and our financial strategy are integrated into our succession plan is critical, and those values have to be transferable to how the organization operates. They cannot live only inside the leadership team. They have to be embodied in every person, those who are succeeding into other roles and those who are continuing on. We coach our clients to build that institutional foundation on values, because that is what makes an organization who they are, and what makes them truly resilient and authentic. 

Joey: Jennifer, what financial aspects should an organization consider with culture when it comes to succession planning? 

Jennifer: Organizations with a strong culture typically receive a higher valuation in an acquisition or similar transaction. That is one of the top things a buyer is looking for, because they want to retain the employees of the company they are acquiring. If there is a strong culture in place across the organization, the cost to integrate teams is much lower than when culture is weak and teams don’t connect at the value level. 

Chapter 5: The Financial Discipline Behind Development 

Joey: You previously walked us through the cost of reactive versus proactive succession planning. What does the financial discipline of development investment look like? 

Jennifer: Developing the culture is one of the first things an organization should be looking at and investing in, because a strong culture takes time. It is not something you can implement in a year. If an organization is deciding to go to market and consider an acquisition, that is not a short term move. It is something that has to happen over the long term. It is a continuous investment in the team, the organization, and the culture of the company. 

Joey: Nicole, how would you say this lands on the people side of things? 

Nicole: Culture is happening whether you intend to build it or not. Even a lack of intention to build a culture creates one. To Jennifer’s point, it is not a one off. It is happening, period. From an investment and people perspective, your people are your revenue drivers. They will make or break your business. You want them positioned in a way that the culture is intentional, not just a byproduct of unmanaged behavior. 

Nicole: In small to mid sized organizations, succession is more challenging than in larger organizations because the capital investment isn’t as deep and the talent pool is smaller. So the culture lens is even more critical. From a retention standpoint, culture starts with who you want to attract, who you want to retain, and who your high potentials are. Your high potentials are the ones paying the most attention to culture, because they can work anywhere. You want to be building a culture they want to work in. When leaders don’t do what they say they will do, that erodes culture, and employees feel it most at the operational level. As we execute a succession plan, we have to understand culture at the team, group, employee, and leadership levels. It cascades through the organization, and we have to be intentional about all of it. 

Joey: Fran, when you advise CEOs, does the financial framing change how they allocate resources? 

Fran: It really does. When we are modeling development investment, we model it with the same rigor we apply to any other capital allocation decision, because we have to be intentional about which investments we are making and why. As Nicole said, small and mid sized businesses have finite resources. So the question becomes, which development investments have the highest expected return? That is a critical conversation when we are trying to develop the right players to succeed and there are honest questions about whether they will be able to step into the role. 

Fran: To Jennifer’s point, this takes time. These are not things we accomplish in a month or two. Small and mid sized businesses should be looking at their talent regularly and making investments over time, because doing so spreads the investment of resources thoughtfully and sustainably. 

Closing 

Joey: Lots of great insights here from everyone. We are actually going to finish up this conversation on succession planning in the next episode, so stay tuned for that. Thank you, everyone, and we will see you next time. 

Fran: Thank you, Joey. 

Nicole: Thanks, Joey. 

Jennifer: Thanks.