So, you know you need to plan for your succession…eventually… even if you don’t plan to retire anytime soon. Where to begin? Start with an assessment of your current strategy, goals, culture and key people. This will clarify the gaps you need to close, and set the roadmap for your direction over the next couple of years. It’s also a great starting point for identifying the people you will entrust to carry your company forward, profitably and sustainably. (who will care for your baby?)
Your goals and strategy assessment will help you understand what needs to be done, your key people assessment will help you figure out what particular competencies, skills and experiences you have to work with and whether they will be sufficient to deliver your strategic plan. Your culture assessment will clarify the framework within which your business functions today. A strong and effective culture facilitates growth, profit and sustainability. A negative or toxic culture creates instability, poor productivity and high turnover.
The key questions you want to answer are:
- Will your current strategies be sufficient to deliver the business valuation you need to fund your retirement, meet your personal financial goals or achieve your business objectives?
- Can your management team deliver the strategy and goals – without your week to week involvement? If not, what will it take to prepare them to do so?
- Does your current culture support stability and growth? Management and ownership transitions create stress on the business. Will your culture support these changes or hamper them?
If your strategies are insufficient, get the right people in a room and rework them. If you don’t have defined strategies, get the right people in a room and define them.
If your management team cannot deliver the strategies and goals, without you, you’ll either need to change the strategies and goals, develop your management team so they can deliver them, or hire new people who can be more effective at implementing those strategies.
It gets particularly tricky when you take yourself out of the equation. For instance, if you are the primary salesperson and your post-succession strategy relies heavily on sales growth, you will need to develop or hire somebody to close that gap.
Your task then will be to assess your high-potential and top performers to see what competencies and experiences they bring and whether they might be able to fill the identified needs, now or in the future. Just remember, this is a long term process. It takes time to develop people. It takes time to hire and onboard new people, no matter how talented they are. Give yourself the time by starting early.
If your culture is negative or toxic, you need to understand the underlying reasons and proactively address them. Changing the culture takes a concerted and intentional effort, and it may require taking a bold stand for the behaviors you want, and a bolder stand to end the acceptance of behaviors that no longer serve your organization.
Here are a few other things to keep in mind as you’re starting to evaluate your employees for future leadership:
- Attitude matters. A lot. You can train skills, but it’s much harder to train attitude.
- Culture counts, too. If your culture is productive, hire people who fit that culture. For example, a deliberate, measured leader would likely struggle heading a fast-paced, ultra-driven company. Likewise, a task-oriented leader might struggle in a relationship-oriented business.
- The role of the CEO includes three main buckets: leading strategy and vision; developing people; and being the organization’s external face. This could include high level sales calls, vendor contract negotiations, forming strategic alliances, etc. Who is prepared to play those roles in your organization?
Beware of a few common pitfalls. CEO’s are optimists. That motivates them to find a way to be successful against the odds. It also can cause them to have a rose-colored view of their employee’s capabilities or potential, or expect the employee can grow more quickly than is possible in the time the CEOs have to train them. When hiring, they may put all of their hopes and dreams into a candidate who may not be able to live up to the billing. Not only can this set the new hire up for failure, but it also can create turmoil among longtime employees in the organization, some of whom may have designs on a top job themselves.
Finally, and I know I’ve mentioned this many times before, beware of not getting started early enough. The timeline to do this well is measured in years, not days, weeks or months. Start now to position your managers to do their jobs well.