This can be difficult. At some point in the succession process, you will have to let your successor know that he is next in line. Though the person you are grooming to replace you must be told, there is not tried-and-true formula for choosing the perfect time.
I've seen this done many ways. In one instance, the successor was chosen years in advance. Everyone knew he was next in line and had years to adjust to the process. This case worked well, but this type of succession does not always work.
In another instance, the successor was part of a three-person competition for the job. He was notified just before he was to take the position. This case worked in this instance, but I would not recommend it every time.
Each succession is unique; however, there are common factors to consider when making your choice. First, how many possible, qualified candidates are available? If there is more than one potential candidate, then waiting ... and getting more information ... will help you make the right decision. If there is clearly a "best choice," there are no other close-running candidates, and the person is likely to leave the company if not being assured of the position, then waiting to tell him or her may be a mistake.
Once you have determined when to tell your successor he is next in line for the position, you will have to figure out how to let his colleagues know of your decision. Many of these executives may well have thought that they had a chance at the job! You may have thought you were being clear about these other executives' chances at the position, but you cannot assume they got the message. Here are two important steps to take:
1. Coach your successor on how to handle each of his key stakeholders ... individually. Some of them will be thrilled with the news, some of them will be angry, some disappointed, and some hopeful. This is to be expected. Role-play with your successor how he will handle these different reactions, before he talks with each stakeholder.
2. Talk with each stakeholder one-on-one before your successor does. Be sensitive to their responses, which may be quite emotional if they had hopes for the job. Let them know that the final decision has been made and do whatever you can to encourage their support of your successor. Be prepared that they may be disappointed, angry, or even leave the company. This is part of it.
Finally, you will probably have second thoughts after the announcement is made. Let them go! Once you have made your final commitment, do not verbalize any doubt. Do whatever you can to minimize your ego and maximize your successor's chances for a successful transition.
My advice is to realize that each succession is different and for each, though there is no magic formula for success, following a few simple steps will ensure the process is a much smoother one.
Life is good.
My newest book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.