Succession Planning Even in Startups

The team is the foundation and core of a startup’s success. Yet early-stage startup teams are small and vulnerable to turnover, so proactive risk assessment and succession planning is essential for business resiliency.

The startup founder/CEO should know the company and its team better than anyone else – and an essential part of the startup leader’s job is continually thinking about the organization’s risks with an eye towards contingency planning for how to mitigate the unexpected. With so many problems to resolve, a startup leader can often skip over staffing contingency planning as just not the most urgent and important thing right now. However, while the most obvious and likely scenario is the unexpected resignation of a team member, pregnancy, sudden or severe illness, and even death can also blow a gaping hole into the often small team at the heart of the startup.

Regularly Run the Thought Experiment and Imagine the Downside Possibilities

In my decades at the helm of a multitude of startups, I learned the hard way not to underestimate the chances of the unexpected loss of a team member sucker-punching my startup. The following examples might help you imagine what it might look like for someone on your team to get hit by the proverbial bus:

• The call at dawn on one Monday morning from the girlfriend of one of our team members to tell us that his recovery from pneumonia that had seemed to be going well only a few days earlier had unfortunately turned deadly. Now we would not be getting him back – and we had to simultaneously cope with the grief of the loss of a teammate while simultaneously figuring out how to replace his unique skills.
  
  
• A manufacturing vice president who suddenly started terrorizing his team and had to be abruptly fired to protect the rest. Then as we coped with the gap in leadership, we began uncovering the unethical work had been happening at his hands that put the whole company at risk.
  
  
• The CFO who went to what he thought was routine doctor’s appointment only to discover that he had terrifying heart blockage that demanded emergency procedures right now. The notification that he was headed into the cath lab came via text along with no real timeline for recovery and return to work.
  
  
• The announcement by a number of expecting first-time parents of the soon-to-arrive new bundle of joy raised the specter of both the risks of pregnancy and birth as well as the possibility of problems with the new baby that might come from a premature delivery, congenital heart problem, or other trouble that lands the newborn in the neonatal intensive care unit. Even with a healthy birth, most new first-time parents cannot fathom the degree of exhaustion and risk involved – and while you want to remain hopeful and positive, you also have to plan for the possibility that all does not go according to plan.
  
  
• A series of team members getting socked with COVID in succession with a range of severities from just a week or two of flu-like symptoms to days in the ER and ultimately in the ICU with potentially uncertain outcomes.
  
  
• The employee who collapsed and began having a seizure right at the door to my office, necessitating a 911 call and ambulance transport plus uncertainty on what it might mean.
  
  
• Even the few people who simply did not show up one day and, for a while, we could not even confirm what had happened let alone whether they would be coming back. Sometimes, the problem proved to just be an immature handling of a resignation, while in other cases, they were the victim of murder or a car accident.

Hopefully all those real-world startup scenarios give you some sense of just how the unexpected loss of teammate(s) can have a major impact.

Think Practically to Prepare for the Unexpected

So, amidst all the pressing priorities of leading a startup, what are some practical steps that can help manage your risk? 

• Routinely mentally run risk scenarios. Every few months mentally run through your direct reports and imagine what you might do if one of them was suddenly unavailable. Ask your direct reports to talk through their teams with you. These thought experiments are the bare minimum – and the ideas below will improve upon it.

• Insist on having emergency contact information for the spouse or relatives of every employee. Who would you call if someone becomes ill or has an accident at work? Who would you call if someone did not show up as expected while traveling or even to the workplace?
  
  
• Periodically have a “backup planning” session with the broader team. This can be a good contingency planning exercise that, if done routinely, can help improve your resiliency planning as well as help everyone consider potential risks together. Ask yourselves “what would we do if, God forbid, something happened to one of us?” and “what are some problematic scenarios that could happen?”  Time-box the discussion and write down the answers into a checklist/plan.
  
  
• Establish a “depth chart” for all roles.  For small teams, list each role, who currently holds that role, and then who would be first and second to step in if that primary individual were unavailable. There is value in identifying who the backups are, even if the fit is imperfect because that can alert the backups to pay a bit more attention to what their colleague is doing. Involving the broader team can sometimes surface some hidden expertise that could be tapped in a crisis. It helps to document a plan, even if that plan is that the CEO takes over for many of the roles because patterns like this can highlight weaknesses and gaps that can be addressed to develop next-level bench strength over time. For C-suite roles, keep the Board of Directors apprised of your plans.
  
  
• When confronted with the unexpected loss of a team member, think creatively about who might be tapped to help or if the gap can be tolerated for a short time. Teammates might be able to cover for a period of time. A Board Director might step in on an interim basis. A consultant might be able to help. A service provider might have some resources that could be deployed.
  
  
• Remember to build out your contingency plans by noting the most critical knowledge, skills, abilities, and access for essential team members. Does someone know enough about what they are doing that if they were hit by the proverbial bus, there would be a chance of picking up the pieces of their work? Are there methods of tracking and documenting important work? Is a plan for backup access to critical systems in place? Do you have a way of getting at their data on a laptop, central system, and so on?

While balance is required, an ounce of prevention is worth a pound of cure so disciplining yourself and your team to put some thought into developing and documenting backup plans is one of those essential parts of maturing an organization. Business resiliency in the face of the unanticipated loss of a team member is a sign of good management.