[font=Arial, sans-serif]Many companies are about to find out what happens if they haven’t been proactively developing bench-strength. Not only is the economy recovering, but Boomers are retiring, which means people will be on the move—leaving for new opportunities, or leaving permanently.[/font]
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[font=Arial, sans-serif]Only 23 percent of U.S. businesses have a formal succession plan in place, according to the Society for Human Resources Management. And data from the Family Business Institute shows about 30 percent of family businesses survive into the second generation and 12 percent into the third generation. [/font]
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[font=Arial, sans-serif]Complacency about succession can be the little mouse that chews the wires on your company’s engine. Here’s what I’ve seen:[/font]
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[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]The owner’s son doesn’t want to run his dad’s business, but dad pressures him into it.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]The most critical technical person in the company died, with no backup.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]The woman, who everyone assumed would take the VP of IT role when the VP retired, wasn’t interested in the extra pressure.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]The father prepared his son but rushed out the door without a firm plan in place for the father, who wanted a temporary management role.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]The head of sales left the company and his replacement was a better salesperson than a leader.[/font]
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[font=Arial, sans-serif]All of the above situations created risk for these businesses, and cost the companies time, money and morale.[/font]
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[font=Arial, sans-serif]You may be thinking, “We have our successors all picked out, so those things wouldn’t happen to our company.” Not so fast… Succession planning is not choosing your replacement or winning the lucky gene pool. In fact, I think Succession Planning is a misnomer--it should be called Succession Development.[/font]
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[font=Arial, sans-serif]Here are some development ideas for any company:[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]Have regular development discussions with every employee, to discover their interests and find ways to grow them in the job they have now.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]For high potentials, who want to expand their responsibilities, look for opportunities to “sub and swap” them into temporary roles. For example, several of my large clients are experimenting with ways to develop global acumen, without lengthy expat assignments. A short term “swap” with someone overseas, or a “sub” for a maternity leave, is desirable, doable and affordable. [/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]Rotate would-be executives into areas outside of their functional expertise, to test and grow their leadership skills. Without their technical expertise as a foundation, they will be forced to rely on the technical expertise of their experienced staff, and they will get a fresh perspective as they experience a new part of the business.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]Have your senior leaders participate in a facilitated Talent Inventory, where all their direct reports are thoroughly discussed by the cross-functional team. Both technical skills and leadership skills are assessed, as well as readiness and willingness for promotion. Short and long-term action plans for development are created. This process can be started at the manager level and rolled up the organization.[/font]
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[font=Arial, sans-serif]Here are some additional ideas for family businesses:[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]Use outside advisors to help examine three separate areas: the family, the ownership and the business, to find the right balance. Each family business is unique and these three systems will overlap and intersect—and should be consciously managed.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]Determine early who has interest in joining the family business, and early on, let them experience key areas of the business. This exposure to employees and customers gives them a better understanding of the company and helps them figure out in what they are interested. [/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]To eliminate entitlement, expect family members to produce results as if they were an outside hire. Empower their managers to give them honest feedback without pulling any punches.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]Expect family to get outside experience that tests their skills and exposes them to other businesses. Not only will they bring back valuable insights, they will gain confidence by proving to themselves and others they earned their leadership position (not just inherited it).[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]Actively develop non-family members, to keep talented employees.[/font]
[font=Symbol]·[font=Times New Roman] [/font][/font][font=Arial, sans-serif]Choosing the leader of the business should never be a forgone conclusion. Even with good planning, a family member may be the wrong choice to lead the company into the future. Develop a group of trusted, objective advisors.[/font]
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[font=Arial, sans-serif]Joan Lloyd [/font][font=Arial, sans-serif]is a Milwaukee-based executive coach, organizational & leadership development strategist. She has a proven track record spanning more than 20 years, and is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Email your question to Joan at info@joanlloyd.com and visit www.JoanLloyd.com to search an archive of more than 1500 of Joan’s articles. Contact Joan Lloyd & Associates (414) 354-9500. ©Joan Lloyd & Associates, Inc.[/font]
