Don’t Be Like Logan Roy: 3 Succession Planning Policies Inspired by "Succession"
Don’t Be Like Logan Roy: 3 Succession Planning Policies Inspired by "Succession"
The hit television show "Succession" may be over, but America’s problem with succession in the workplace is just beginning.
In most ways, the high drama of the popular HBO series "Succession" is not reflective of what happens in real workplaces: luxurious mega-yachts, irritable billionaires, and hostile takeovers are not a part of the average person’s day-to-day office experience. However, the central dilemma of the recently-concluded show – the challenge of transferring leadership from an aging corporate titan to his restless children – does mirror a real issue that is beginning to challenge employers everywhere: the mass exodus of baby boomers from the national workforce.
The baby boomer cohort, usually defined as those born between 1946 and 1964, command an outsized influence in American businesses due to their high levels of experience and disproportionately large representation in the C-suite.
Though the dominance of this generation has persisted for an exceptionally long time, demographic data tells us that it will soon be coming to a close: the oldest baby boomers are now in their late 70s, 10,000 of them are hitting retirement age every day, and it is likely that almost the entire generation will age out of full-time employment within the next decade.
Their departure from the working world will create a massive leadership vacuum in corporate America and further exacerbate the challenges posed by declining demographics, a shrinking workforce, and chronic labor shortages.
To proactively manage this difficult period of generational transition and avoid the chaos shown in 'Succession', employers should consider the following three policies:
1. Engage Stakeholders Early and Make Sure Legal and Financial Documents are in Order
In "Succession", everything was done on an ad-hoc basis. No formal succession plans were ever drafted, big decisions were made for emotional reasons, and critical secrets about the state of the business were kept from even the highest levels of leadership (see season one, when Kendall Roy learned that his father was hiding $3 billion in corporate debt).
Needless to say, companies in the real world shouldn’t emulate this haphazard and opaque management style. Instead, strive to be proactive, transparent, and inclusive of key stakeholders and potential successors by following the guidance below:
- Identify all employees who have a large stake in the ownership and operation of the company. Ensure that they are included in succession planning exercises and that they have access to critical information about the true state of the organization. This enables a broad group of stakeholders to work together and make informed decisions about the future from a legal, financial, and professional perspective.
- Once everyone is on the same page, consider the following questions: Does your organization have a formal buy-sell agreement in place? If so, is it up to date? Are partners financially able to buy out each other’s interests when the terms of the buy-sell agreement go into effect? Does everyone understand the definition of disability which triggers the buy-sell agreement to come into play? Does everyone know how much time they would have to come up with the funds to buy out an interest upon a partner’s or owner’s death or disability? If the answer to any of these is “no”, work to address these issues today so you don’t need to scramble during a future emergency.
- On a similar note, it’s worth considering how your disability and life insurance policies compare to the terms of the buy-sell agreement. Leadership should review the terms of the policies currently in effect, compare them to those of the agreement, and ensure that they work well together. The agreement, coverage, or both may need amending to have terms that match each other.
2. Encourage Mentorship Programs to Prepare New Leaders
"Succession" clearly demonstrated the perils of gatekeeping knowledge and depriving potential successors of mentorship opportunities. Though Logan Roy gleefully installed family members in key positions at his company, he was never able to properly train them to fill his shoes one day. Instead, his unqualified roster of nepotistic appointees sucked all the oxygen from the room and prevented more viable candidates from learning the skills that Waystar-Royco would need in a post-Logan world. Logan may have even realized this mistake before his death: in season four, he indicated that he didn’t believe any of his children were qualified to take his place by telling them, “I love you, but you are not serious people.”
This dramatic example illustrates why employers should establish plans and processes for experienced employees to gradually transmit knowledge and responsibilities to their up-and-coming peers:
- Mentorship policies that pair established professionals with younger colleagues are an excellent way to prepare the next generation of leaders, keep older employees engaged, and retain younger employees by providing them with a clear path for career growth.
- Formal succession plans should be drafted for those nearing retirement age in order to prevent confusion, encourage the orderly transfer of knowledge and responsibilities, and establish a transitional timeline with milestones and goals for departing employees to meet.
- These types of programs should be expanded beyond the boardroom and applied to employees of all stripes. If someone’s retirement will cause significant issues or disruption, formal succession planning should be on the table, no matter what their position.
- There should always be a plan in place for the sudden departure of any employee who occupies a critical position in an organization. Though retirements are usually not split-second decisions, death and disability can occur in an instant, even for those who are young and healthy. If the worst were to happen, it is better to be prepared.
- Executive leaders who want to be proactive about their own succession need to find someone with a shared vision for the business who is willing and able to buy out their interests and continue their work. Real business owners should not wait until a catastrophic or near-death experience to think about succession planning, but must take the initiative to educate, train, and place the right person or people in a position to seamlessly take over the business when the time comes.
3. Provide flexible options for semi-retirement
It was clear from the outset of "Succession" that Logan Roy had stayed in his role as CEO for far too long. Though Logan’s physical and mental health were clearly failing, he continued to cling to the top job right up until his death in season four. While literally working until you die is a bit extreme, it’s true that many older employees in the real world are reluctant to pass the torch and wary at the prospect of full retirement.
This, along with the realities of lengthening lifespans and chronic labor shortages, form the key arguments for employers to experiment with new contribution models that enable seasoned employees to continue contributing deep into their twilight years:
- A combination of slowing birth rates, a shrinking working-age population, and a reduced labor force participation rate have resulted in a general post-pandemic labor shortage and increased employers’ dependency on older workers.
- The conventional retirement age of 65 is no longer as elderly as it once was, and people today are living much longer than in previous eras. In fact, OECD data indicates that the post-retirement life expectancy of the average American has grown by ~25% since the 1970s.
- Unfortunately, millions of older Americans have seen their retirement savings take a hit due to high inflation, forcing many of them to suspend their retirements and return to the workforce in some capacity.These factors create a mutual incentive for both employers and employees to experiment with new contribution models.
- Employers should consider offering semi-retirement options that feature flexible part-time scheduling, the option for remote work, and the ability for seasoned employees to function as in-house consultants that provide guidance to their younger colleagues.
In the end, the irony of "Succession" was that Logan Roy pushed off retirement and succession planning for so long that he ultimately had no control over the future of the empire that he created. After Logan’s passing, his company quickly came under the control of outsiders, the influence of the Roy family plummeted, and a man who Logan did not respect was installed as a figurehead CEO.
Even companies that bear little resemblance to Waystar-Royco can take lessons from the show’s depiction of a horribly bungled generational transition. The struggles of the Roy family illustrate why all businesses should take the time to plan for the consequences of the retirement, death, and disability of longtime employees.
Some may consider this to be a bit morbid, but it’s also a critical way for stakeholders to ensure that key business interests are protected and that continuity is maintained. Though the details of "Succession" are very different from the daily lives of most business leaders, the show’s main lesson is universal: start planning today, because tomorrow is too late.
To learn more about how America’s workforce is changing and what employers should do to adapt, check out this blog: How Companies Can Prepare for America’s Demographic Drought.