Succession Will Happen, Whether You Plan For It or Not!
Published on: Saturday, December 12th, 2015
60% of real estate CEO’s will retire by 2020. Yet only 24% of real estate firms have a plan for succession, and 85% of those plans only cover the CEO—not any other key positions. What’s even more alarming is that only 16% of real estate companies believe they have enough qualified successors for key positions.
Every company will eventually have to deal with succession, whether they have a plan for it or not. You can guarantee that one of the following scenarios will eventually happen with all of your key employees:
- Unexpected illness or death
- Replacement due to poor performance
- Normal retirement
A mistake that companies make even when they do have a succession plan is to only look at what they have today, not what they need for the future. A succession plan needs to follow the company’s strategic plan. How is the company going to change in the next 3-5 years and beyond? What new key positions will you need to fill that you don’t even have now? A few years ago, not many companies thought about a “Social Media” Director. Now it is a critical position for most companies.
Another mistake is to prepare a plan and hide it in the vault, only bringing it out when a key position needs replacing. By then it is often too late to avoid many of the problems that unexpected vacancies can cause. Succession planning must be converted into an ongoing leadership development program. That way, not only are people ready to take over key positions when they open up, they will be better at their current position.
In the words of Christopher Lee, “Succession planning is not an option, it is a requirement.” Whether you are working in a large organization, mid-sized company, or small firm, you need succession planning. Get the conversation started and help prepare your real estate management firm with a solid succession plan.
For more information, check out IREM’s newest White Paper on Succession Planning.
About the Author
Ron Gjerde is Vice President, Knowledge Center for the Institute of Real Estate Management. Ron oversees the production of IREM’s magazine, the Journal of Property Management, and the development of numerous text books and publications on real estate management. He also oversees government affairs and the Income/Expense program.