What’s the difference between companies with strong succession plans versus those without? This may sound like the set up for a joke. But the punchline is more likely a gut punch in reality.
According to USDA Economic Research Service data, U.S. ethanol production totaled about 15.4 billion gallons in 2022, while combined biodiesel and renewable diesel production totaled about 3.1 billion gallons. Behind the numbers are executive teams, boards, technical experts, compliance leaders, commodity managers, and plant operators whose knowledge is often concentrated in a small number of people.
The challenge is not whether leadership transitions will happen. They will. The challenge is whether your organization can move through them without losing momentum at the exact moment market, policy, and operational decisions may be most demanding.
That makes succession planning less about naming a replacement and more about protecting continuity: keeping decisions moving, preserving relationships, retaining institutional knowledge, and sustaining business value when a key person steps away.
“When key leaders exit without a clear transition strategy, the impact is immediate,” said Donna Funk, lead biofuels advisor at Pinion. “Decision-making stalls, compliance and knowledge fractures at the exact moment producers need to move quickly on pricing, feedstock, tax credit, and regulatory decisions.”
The longer a company waits, the more exposed it becomes. Without leadership continuity, teams can become reactive, struggle to maintain confidence with lenders or investors, and lose the institutional knowledge needed to keep the plant steady through margin pressure, regulatory shifts, or ownership changes. For owners and boards, dependence on a small group of leaders can also weaken enterprise value and complicate future financing, governance, or sale conversations.
The risk is real, but the response does not need to be overwhelming. A practical succession strategy starts with a few focused conversations and a willingness to look honestly at where the business is most vulnerable.
The results? Higher valuations and investor returns. Up to 90% leadership readiness lessening vulnerability and gaps. More ability to outperform competitors when vacancies are limited. Also, clear career paths help employees stay longer and recruiting costs are reduced.
Five Ways to Strengthen Leadership Continuity
1. Connect succession planning to where the plant is headed next
“The biggest challenge we see is companies jumping into succession planning before they’ve clearly defined their future goals or the legacy they want to build,” said Funk.
Without that foundation, succession planning can become too focused on backfilling a role instead of preparing the right kind of leadership. A successor who can run today’s plant may not be the right person to lead through a new technology investment, board transition, or acquisition conversation.
The stronger starting point is strategy. Once owners, boards, and executives agree on where the operation is headed, they can identify the financial discipline, regulatory understanding, operational experience, board judgment, and relationship skills the next phase will require.
2. Develop successors before responsibilities have to shift
Funk stated, “Succession planning should not be viewed as a one-time initiative but as a long-term process that evolves with the company and its leadership pipeline.”
That means succession planning cannot live in a document that is updated once every few years. It should be built into how the company develops people, delegates authority, documents processes, and gives future leaders exposure to decisions that shape plant performance, risk management, compliance, community relationships, and board confidence.
For example, a future general manager may need time to sit in on lender conversations, understand tax credit implications, build relationships with feedstock suppliers, and learn how production decisions connect to margins and compliance. Waiting until a current leader gives notice leaves little room for that development to happen thoughtfully.
3. Map critical roles beyond the executive office
A transition at the president, chief executive officer, or chief financial officer level can be disruptive, but so can the loss of a plant manager, commodity manager, controller, compliance lead, lab manager, maintenance supervisor, or board chair. In many biofuels operations, critical knowledge is spread across people whose titles do not always reflect how much the organization depends on them.
As Funk noted, “Succession planning shouldn’t stop at the CEO or CFO level. Every role eventually evolves or turns over, so organizations need to think holistically about who might step in across the business.”
A practical way to start is to ask where the plant would be most vulnerable if one person were unavailable for 30, 60, or 90 days. Could someone else manage regulatory reporting? Explain hedging or feedstock decisions to the board? Maintain key customer or supplier relationships? Lead through an outage, expansion, or difficult margin cycle? Those answers often reveal the gaps a succession plan needs to address first.
4. Build board and ownership transition into the plan
Many biofuels producers have ownership structures, investor groups, or boards that have been in place for years. That history can be a strength, but it can also create risk if governance roles, voting control, buy-sell provisions, or board leadership expectations are not clearly documented.
“A good succession plan is never done in a vacuum,” Funk said. “The process should include a good mix of people from different roles and backgrounds who can challenge assumptions and identify blind spots leadership may not see.”
5. Start with a workable plan, then keep improving it
“The number one thing I tell clients is don’t wait until you have the perfect solution,” said Funk. “The longer you delay trying to perfect the plan, the further behind you’ll fall. The key is simply to start and work through what succession planning needs to look like for each role.”
Waiting until a retirement notice, health issues, investor transition, or unexpected departure forces action usually leads to rushed decisions and unnecessary risk. Strong transitions often take 12 to 24 months — or longer — as responsibilities shift, successors build confidence, and critical relationships are transferred.
Start With the Conversation That Protects the Plant
Succession planning is not just a plan for who replaces whom. It is a way to evaluate whether the business can continue making sound decisions when familiar leaders, board members, owners, or technical experts are no longer in the room.
That starts with honest conversations about where knowledge is concentrated, which roles create the greatest risk, who has leadership potential, and what the next generation needs to learn before they are officially in charge.
A perfect succession plan is not the goal. A stronger leadership bench is. Businesses that begin building that bench now will be better equipped to protect culture, preserve enterprise value, maintain stakeholder confidence, and keep the plant moving when transitions come.
Ready to get started? Connect with a Pinion succession planning expert to begin building a stronger leadership future for your organization.
