Here is a brief excerpt from an article written by Samuel Bacharach for Inc. magazine. To read the complete article, check out other resources, and obtain subscription information, please click here.

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Who will be ready to run your company when you can’t be everywhere anymore? Here’s how to pick your next generation of leaders.

As your company grows too big for you to do everything–the way you do now–you’re going to give over some of the leadership. (Relax. This is a good thing!) For reasons of staff morale, economy, and your own precious peace of mind, it’s better to find your new generation of leaders inside the company. But there’s a rub. Not every longtime loyal employee is really suited to be a leader.

Some have reached their potential and are quite comfortable where they are. This doesn’t imply mediocrity. It simply means that their role at the company and their ambition have converged, and a degree of leveling has set in. Others on your staff might be the “me-me” type–utterly convinced of their own limitless potential and blind to the overwhelming evidence that they’ve gone as far as they’re going to get.

How do you decide who among your longtime lieutenants have what it takes? I point to five criteria. [Here are the first two.]

1. They know the business. Your high-potential employees are the ones who have true expertise and keep learning. Their knowledge may be technical or it may be institutional, but it’s invaluable for the organization. More important, they understand how their activities, their sector, and their realm of knowledge is related to the company’s goals.

2. Others respect them. Your staff members, not just you, also have to appreciate how much your high-potentials know. It’s not enough that your top people know their stuff. Everyone else has to know they know it

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To read the complete article, please click here.

Samuel Bacharach is professor of labor management at Cornell and director of Cornell’s Institute of Workplace Studies. He co-founded the Bacharach Leadership Group. Among his books: Get Them on Your Side and Keep Them on Your Side.  Twitter @samuelbacharach.