If you’re reading this, you’re either leading your firm or would probably like to be leading it someday.

Effective leadership is the single most crucial asset a firm must have to succeed. Firms that need money can borrow; firms without enough business (if there are any these days) can boost their marketing; but firms that lack effective leadership—today or in the future—are in for big trouble.

I encounter firm after firm in which an impending leadership crisis is the chief catalyst pushing the development of a strategic plan, despite the fact that, rationally, we all know a strategic plan is a good thing for many other reasons.

These past years have been good to our industry. Relatively high sustained profit levels and their commensurate rewards have made many current firm leaders feel confident—sometimes overly confident—in their own leadership abilities and have also contributed to their perception that nobody else can do their job. If you are the leader of a successful firm, ask yourself these questions:

  • Do you think of yourself as indispensable? If so, why?
  • Is the “next generation” of leaders in your firm—supposing there is a next generation of leaders—better than you? If not, why not?
  • How can you expect your firm to continue to improve beyond your own tenure?

The longer a leader waits before identifying and grooming his or her successor(s), the larger the apparent “leadership gap” looms and the fewer the options that are open. As a result, too many firms experience a sort of “reverse Darwinism”: while a hesitant leader agonizes over who, if anyone, is capable of filling his or her shoes, the most capable and ambitious of the future leaders leave to join competitors and those who are content to wait it out ultimately take over. Instead of “survival of the fittest,” regrettably we see a “departure of the smartest.”

As a leader, what can you do?

  • Wherever you are in your career, take a broad and open-minded look at the capabilities of others within your firm.
  • Search for up-and-comers who exhibit signs of leadership talent and begin to help them develop their abilities. Remember, someone once gave you a chance to show what you could do.
  • Within your firm’s strategic plan, let those potential future leaders show their stuff by helping to develop your firm’s long-term vision, then implementing the plan to make it happen.
  • First share, then eventually delegate, some of your leadership authority. Let the future leaders take on more until they ultimately take over. That’s the way to achieve leadership continuity.

I’ve said it before and I’ll say it again: Leadership continuity is a make-or-break proposition for every firm.