Grooming a successor is a task unlike any other faced by a privately held business owner. It’s an initiative that can challenge the ego, force one to face their own shortcomings, and test the company’s operational structure.
It’s quite common for a business owner to be concerned about how the business will survive if they’re not there. Succession planning worries include meeting the needs of their employees and their families, concerns about leaving a legacy, and fear of jeopardizing relationships or creating tension when it comes time to choose and groom a successor.
Choose the Correct Successor
Grooming your successor begins with choosing the correct individual for the role. The following are important considerations to make:
- Does the chosen successor want the job?
- Is the successor competent and willing to do what is needed to develop the necessary skills to succeed?
- Is the owner willing to relinquish the amount of control necessary for the successor to transition into a management role?
- Are there other executives who are just as qualified as, or more qualified than, the chosen successor?
Grooming for Success
As a business owner, the responsibility for grooming the next generation of leadership belongs to you. One cannot expect the next generation to have the experience or foresight to understand what skills are needed for the leadership of the business and are usually not able to implement their own management development plan. Additionally, the younger generation may be reluctant to push the topic as they fear it may make them appear greedy. The owner must be the one to formulate and implement the plan and move beyond being the boss to being the mentor.
Many management development plans require that junior professionals entering the business earn promotions to learn the business from the ground up while earning the necessary respect from their colleagues. This process, though lengthy, will allow the successor to be brought along gradually and afforded more responsibility as warranted. Mistakes will be made, but as a mentor you can help them avoid the same mistakes you made in your formative years (while remembering that mistakes make for great learning opportunities).
A pivotal time in the process for the successor will come with the move into an executive position. Even though a successor may have worked for the company for years, he or she may still require additional development to step up to a management role. An entirely new set of skills must be honed or acquired to develop an understanding of strategic and financial planning, accounting fundamentals, relevant industry knowledge, crisis management, leadership, and sales and marketing, as well as critical interpersonal skills. Being a good employee does not always translate to being a good business owner.
A good succession plan requires careful thought and attention, especially during the critical transition period when the successor’s and owner’s roles are intertwined and evolving. Too many business owners overlook the need to develop the necessary procedures to ease the transition of leadership. A successor must be groomed to succeed, not set up to fail.
Developing the Successor
Developing someone to be a business owner may seem unusual for a founder who had to figure things out for themself. But a thriving business is an excellent training ground for developing leadership skills, understanding the nuts and bolts of the organization, and acquiring the business acumen to ensure a seamless transition. As your successor’s skills and capabilities develop, involving him or her in business decisions will create a feeling of contributing to the business, and will build confidence not only for the successor but throughout the organization.
Understanding your successor’s ability to lead is a key decision point in the process. While you may be able to develop leadership skills, it is important to recognize that if your successor does not have the DNA to lead, then he or she may never be able to step up; be honest with yourself and your successor in this regard. If it becomes apparent that the person isn’t right, don’t hesitate to recruit someone else.
Identifying more than one potential successor isn’t unusual and has its benefits – it avoids tying your transition strategy to one person, only to have them fail to meet expectations. If you have multiple successors, it is important that you create well-defined job descriptions, career paths, and performance reviews to prevent your executives from tripping over each other while vying to eventually sit in your seat.
