manulife-make-succession-a-success

When we think of succession planning in an owner-managed company, it’s easy to jump to the conclusion that it’s all about the owner’s plan for transitioning away from the business. But that’s just one piece of the puzzle. Proper succession planning includes the whole company. As you look around at the people who help you manage and run the company, take stock of how much grey hair you see. If you see a lot, it’s time to put some thought into who is going to fill your key positions when the people filling them decide to step down.

Why is a plan for management succession important?

  • It helps you manage risk. Your key people have a lot of contacts, procedural knowledge, experience, skills and “tribal knowledge” that isn’t documented. If they get sick, have an accident, die, retire or just find a different job, you risk disrupting your business, which in some cases could cost you hundreds of thousands of dollars. Should that happen at time when you are thinking of selling the business, it could be catastrophic.
  • It positions your business for the future. Succession planning enables you to look to the future, identify opportunities and identify people internally (or externally) who can champion new initiatives.
  • It allows you to be proactive in hiring. When you have a plan, you can keep your eyes open for specific talent—even if they are not currently available.
  • It engages employees. High potential employees—the ones with the right attitude, initiative, drive and ambition to be leaders—are looking for opportunities to advance. If they don’t see a career path in your company, they’ll look elsewhere.
  • It aligns your strategy with your staff. With a succession plan, you match your people to your long-term goals and vision. Without that alignment, you can’t get to where you want to go.
  • It gives you peace of mind. When you have the plan in place, you’ll build a stronger company and you’ll sleep better at nights knowing that you’re on track.

My definition of succession planning is as follows: it’s the process of identifying, recruiting, training and assigning the right people to the right roles with the right skills and experience to do the right things at the right times in order to support the business owner’s vision, goals and strategy for the business. It encompasses a lot, but if you break it out into stages, it’s surprisingly easy to implement.

1. Start with the end in mind

What are your visions, goals and strategies for your business? Imagine it’s the day before you sell your business. What does it look like? What are the company’s unique strengths and opportunities? What are the values that you hold dear? What are the sales, profitability and EBITDA goals? Spend some serious time to think about, and documenting, these things so you can see the endgame as clearly as if it already happened.

2. Decide what roles are required to execute the plan

If you envision exporting to a new country, what role needs to be created to make that happen? If you decide you want to be named an employer of choice, what role will champion those causes? Of course you will have your traditional roles as well; your heads of sales of sales, finance, marketing and operations. To begin, don’t attach any names to the roles. Just put the role itself on a Post-it note on a large piece of paper or white board and build an organizational chart to align with the vision.

3. Determine what each role will be responsible for

How will the person in that role be judged successful? List the outcomes on your sticky notes.

4. Assess your employees

Who best fits each role, and who will take responsibility for the results you want? In many cases, they already have the job. Sometimes, though, if you step back and view the big picture, you’ll find several people are doing things that should be assigned to one person, or one person is doing tasks that should fall to someone else.

5. Put the right people in the right roles

While you’re at it, provide them with training to shore up the skills they need to succeed.

6. Fill the gaps

If you’re missing people in key roles, recruit and train new people to fit the roles. Don’t settle for second best. If you have to pay a little extra to get the right person, it’s likely worth it.

8. Cross-train

Get managers to job shadow and swap roles so there’s backup if they leave for any reason. If anyone thinks they are indispensable, give them a warning to teach others their responsibilities. If they still think that in six months, consider firing them. You want team players.

9. Document your processes

This might seem like a drag, but it will make it easier for someone new to step in when necessary.

10. Communicate, communicate, communicate

You’ll get resistance to change, but you’ll get less of it if none of it comes as a surprise. If you’re confident in your vision, share it, and share it often.

• • • • •

Succession planning is like exercising. It takes effort and time, and you can probably get by without it. But if you don’t do it, it will someday catch up with you. Better to take care of it now to ensure a more successful—and enjoyable—future.

Wayne Vanwyck is the founder of The Achievement Centre International in London, Ont. He is the creator of The Business Transition Coach Forum and the author of the best-selling books, Pure Sellingand The Business Transition Crisis. He has been training and coaching business owners for the past 30 years.

MORE ON EXIT PLANNING:

Do you have a succession plan in place? What’s your strategy for future-proofing your employees? Let us know by commenting below.

Loading comments, please wait.