You probably have heard your CEO or a member of the board expound on the need to have a succession communications plan. (Perhaps you have been the one doing the expounding.) And it’s true: public companies should put significant thought into how they will communicate the transition of a C-level executive or board member. But usually, that’s where the conversation ends.
More often than not, communications professionals walk away from these discussions wondering what goes into the plan. With that in mind, today we discuss the five essential elements of a successful succession communications plan.
- Make the plan
As soon as you know your board is conducting a CEO search, create a detailed timeline that will keep your succession communications on track. Name each task with the target completion date and the name of the person or people responsible for implementation. List all the materials that are necessary for the announcement, including drafts and final versions. Also, make sure to include in the timeline daily or weekly update meetings to hold accountable the internal communications / investor relations team and any external counselors. Think, too, of the planning items that will be part of the process but won’t be made available to the public. For example, whom will the Board select as its spokesperson for the announcement? Being systematic and detailed will help avoid last-minute headaches and afford the company sufficient time to evaluate the progress of the plan.
- Decide on the (few) critical messages
Communicating succession is a company’s opportunity to detail the Board’s vision for the next CEO, and by extension, the company. If you’re announcing a previous CEO’s departure, use this as a high-profile chance to advertise for the position. List the qualifications and experience you are looking for and how these tie into the Board’s strategic vision for the company. If you’re announcing the new CEO, emphasize the primary reasons he or she was selected, clearly outlining the new corporate strategy or explicitly affirming the existing one. These points all must be clear to the investment community if you are to succeed in selling that vision. In making your case, it will be tempting to pack as many points into the announcement as possible, but this is a situation when “less” is “more.” By winnowing your messages to just a few, your thesis will crystallize in the minds of investors, sell-side analysts and the media.
- Specify the communications vehicles
Now that you have determined your messaging, where will you communicate it? A press release is a must, at a minimum, but there are several other options. An investor conference call, media interviews and corporate website videos all are appropriate options. You may also consider specialized content for the corporate website, such as a letter from the chairman or a corporate video. Even the new CEO’s bio should contain the proper messaging. In fact, make sure the same themes run across all of your materials, whether print or electronic. Otherwise, you will unwittingly confuse these finely honed messages.
- Prepare, practice, repeat
Remember, it is imperative that your CEO create a positive first impression. Prepare him or her and the corporate spokesperson with rigorous media / presentation training. We don’t mean a quick run-through. Grill the CEO with questions both media members and investors will ask. If you’re planning an investor conference call in conjunction with the announcement, you will want to prepare the presenters for public speaking. This will both enhance public perception and set a baseline speaking style on which to build and improve in the future. Busy executives sometimes leave Q&A prep or presentation rehearsal until the last minute -- if they practice at all. But if you include this section in your plan, you increase the probability that training will occur. The benefits of closer rapport with investors and a clearer understanding of the company’s key messages will far outweigh any perceived time costs.
- Let investors meet your CEO
An added wrinkle in succession communications is that the planning doesn’t end with the announcement. Whether the new CEO is promoted from within or appointed from the outside, you’ll want to spend the next several weeks fostering relationships with the analyst and investor community. The talking points you crafted back in step one will become a godsend when the CEO is meeting investors and deciding what to say. To communicate the strategy in greater detail and generate support from investors, consider hosting an investor / analyst day within the first year of the CEO’s appointment. Generating support from your investors is no guarantee the strategy will achieve its aims, but that support can help make the road ahead smoother when speed bumps arise.
Whether the board planned your CEO’s succession in months or minutes, the goal for your communications strategy should be to present a thoughtful, orderly transition and to establish positive investor relationships with your new CEO. A thorough communication plan can make even a hurried transition appear orderly, so focus on the details. By doing so, you’ll be more likely to effectively communicate the CEO’s transition, alleviating investor uncertainty and garnering support for the successor.
Maureen Wolff is CEO at Sharon Merrill Associates. She is a National Investor Relations Institute Fellow, Senior Roundtable Member and Honorary NIRI Boston Director. She is a trusted advisor to CEOs, CFOs and boards of directors on critical communications issues, including corporate governance, shareholder activism and proxy contests, CEO succession planning and disclosure issues.