In an earlier article, I proposed some solutions should your second-in-command leave or pass on. Here we will deal with a different challenge—the total loss of your top commanders.
When Peyton Manning announced his retirement, the Denver Broncos entered “The Twilight Zone” of succession planning. During the 2015 season, Manning was injured and the team’s backup quarterback demonstrated his leadership and quarterback abilities by compiling a winning record.
But now the backup, who was groomed and could have run the team, has elected for free agency and signed with the Houston Texans for $72 million. The Broncos are now without an experienced quarterback and they will need to compete in the free agent market for a replacement.
What would happen if your CEO retired and the second-in-command left to work for another firm? What could you have done to prevent this disruption in leadership?
In an article published by Stephens Associates Ltd. of Dublin, Ohio, a number of questions that could increase your ability to retain your key executives are posed.
Is your compensation program in line with the industry or marketplace?
When is the last time you performed a compensation survey of your industry? A professional recruiting firm could provide this information, so you can assess if your salaries and other compensation are competitive. Responding to another firm’s offer could cost you more than just ensuring your compensation package is competitive.
Is the career progression clear and are there continued opportunities to grow?
It is imperative that your key executives know their career paths and see continued growth in responsibilities and influence. Ambiguity in career path could provide an opportunity for another firm to recruit your future leader.
Is the job fulfilling and does he or she have a measureable impact on the organization’s direction?
Have you designed the position in such a manner that the executive feels and sees his/her impact on the organization’s direction and success? This can be achieved through formal and informal feedback channels and through financial and production reports.
Does the position provide the necessary compensation and participation in building the necessary equity to meet the long-term needs of his or her family?
The long-term compensation program should be designed in such a manner that leaving the company prematurely would introduce measureable financial penalties.
Is this executive relevant to the company and viewed as a valuable entity?
Does this executive have the necessary voice in the company’s direction? Is he or she involved in the development of the long-term strategy and its implementation? These elements of influence and control are important to the “ego” of the key executive.
Had the Denver Broncos taken the necessary steps to retain Brock Osweiler at quarterback, they would not find themselves competing in the free agent market. There are a number of options open to the Broncos and general manager John Elway. Sign a free agent like Sam Bradford of the Eagles or Ryan Fitzpatrick of the Jets, or take a quarterback in the NFL draft. These options have inherent risk. Will these experienced quarterbacks “buy in” to the Broncos’ culture and game plan? How will the fan base react to drafting a young quarterback and rebuilding a team that just won a Super Bowl? These questions should have been considered before the team offered Osweiler only a three year deal worth $45 million. This decision could turn out to be a big mistake.
As an owner, you cannot afford to lose a key executive and not have someone ready to step in and take the helm in today’s turbulent waters of business. The Broncos are now sailing into the choppy NFL seas without a captain at the helm. n
-Cary Silverstein, MBA, is the president of SMA LLC and The Negotiating Edge. He leads a group that provides services in the areas of strategic planning, negotiation training and conflict resolution, with offices in Fox Point and Scottsdale, Ariz. He can be reached at (414) 403-2942 or at Csilve1013@aol.com.