Planning on getting out of the rat race by handing over your business to the younger generation? Even if that seems some way off, it’s time to start succession planning. George Thompson, joint MD of Harrison Scott Associates - one of the UK’s largest recruitment company in the print, packaging and paper sector - talks you through the process.
1.Accept the inevitable
Many people questioned how Apple would cope without Steve Jobs, or whether Chanel would last without Coco. Microsoft founder Bill Gates once said: “Take our 20 best people away, and Microsoft would become an unimportant company”. But, the thing to remember is that all the important people within all companies will have to pass on the baton one day and the first stage of succession planning is to acknowledge this - recognise where the company stands, how it got there, and where a successor could take it.
2.Learn to let go
CEOs and MDs are generally entrepreneurial individuals. If you are one you probably treat your company is like a baby and find it difficult to image it surviving without your help and guidance. Many owners - with good intentions - appoint a successor to train and develop, only to then take back the reins shortly before the intended retirement date. Don’t do it - learn to let go. Not doing so shows a lack of confidence in the future leaders, often having a negative impact on motivation and morale, and in turn on the company’s succession.
3.The sooner the better
The sooner you start succession planning the smoother the transition will be. It stands to reason - your successor will have more time for personal development, learn the ropes of the company, and be ready to take over when the time comes. Allowing a considerable amount of time to develop a solid plan avoids the possibility of having to bring in an external party who may not be emotionally involved with the company, and therefore detrimental long term.
4.Internal or external?
Many a CEO’s instant thought when developing a succession plan is to develop a luring job description to advertise externally and bring in new talent. Outsiders may bring different experiences and fresh ideas to the table. However, very often the best talent already exists within the company. Building a team of future successors from within can reduce risk, as they will be more emotionally invested within the company and therefore more likely to be in it for the long haul. If recruiting externally, carry out thorough assessments.Now if Google can understand the content in the manner it is laid out then Google can use this data to answer search queries due to trusting the content. This is a simple process to understand once this is fully appreciated it should become clear how you can find yourself attracting a Google penalty by creating false backlinks on spammed blog sites and forums.
5.Salesman or real successor?
The demand for first class sales staff has always surpassed supply. A retiring business owner might think to “kill two birds with one stone” and recruit for the enticing position of ‘managing director designate’ to attract a superstar. However great sales people don’t always have the appropriate leadership qualities. All personality traits, track record, and experience need to be considered when choosing the right person for the job, not just an individual’s turnover.
6.Discover hidden gems
It sounds obvious, but carry out a comprehensive and scrupulous selection process to find the candidates with potential to be the best all-round leader. Use structured assessment tools facilitating comparisons between key talents’ skills, personality, decision making and potential. Identify which employees are worth dedicating time to further develop. It will be easier to pinpoint strengths, weaknesses, needs and issues, and thus the realisation of full potential, if top management make a point of encouraging personable relationships. This also lays the groundwork for analysing employees further in terms of career aspirations and constraints, thus determining who the right person is for the job.
7.Spread the skills
Horizontal development is considered just as important as upwards progression when nurturing a future leader. As a CEO/MD, it is fundamental to have an in-depth knowledge of all parts of a business, so the acquisition of new skills is an invaluable part of the personal development process. It also alleviates boredom and monotony, thus increasing job satisfaction. Challenge potential successors by delegating stimulating cross-functional projects, and develop new skills through the allowance of space for more responsibility and rotation programmes. Work shadowing and mentoring are also effective ways of developing knowledge in other departments and identifying skills gaps along the way. Climbing straight up the organisational hierarchy through promotions is no longer regarded as the most effective approach.
8.Transfer the knowledge
What if you’re the only person who understands the critical parts of your company, and something happens? The transfer of knowledge and retaining vital skills is key to the stability of any business. There are two types of knowledge - explicit and tacit. Explicit is the type that can be easily transmitted to others, through verbal exchange, documenting and coding. Don’t just rely on someone’s memory of verbal explicit knowledge transfer; create clear and concise physical documents, coded if necessary, outlining how processes work. Tacit knowledge is the type most valuable in managing performance, but also the type most difficult to capture and transfer. Exploit the expertise of senior workers by encouraging coaching or mentoring, developing knowledge gained from experience, and through participating in key decision-making processes.
9.Communication is key
Nothing boosts employee morale - and in turn increases productivity - than recognition and appreciation of efforts. Although you shouldn’t make any promises, it is important to let successors know that they are valued - why there is a focus on their development and progression within the company. If the potential successor is transitioning through well-targeted development efforts, they are more likely to stay with the company, thus maximising employee retention. It is also vital to clearly and concisely define roles played by stakeholders so there is no miscommunication and misunderstanding regarding individuals’ role in the planning process.
10.In it for the long haul
Succession planning is a key part to any company’s long-term business strategy. The plan should be kept in line with the organisation’s overall strategic and operational goals. Determine the key areas with the most potential to grow, and therefore which members of staff would be most capable of supporting this. Assess which areas may decrease in size over time and whose knowledge will not be so relevant in the future. Consider the rapid changes in technology, and who is most technologically savvy to take the business to the next level. Is the company aiming to develop internationally in the future, and will you need to consider the most ambitious employee with the most international experience? Anticipating which new roles will derive from these strategic developments, and which will disappear, is also valuable. This assessment could highlight certain talent gaps within the organisation, and prompt the implementation of learning and training, carrying the team forward to fulfil outlined goals.
11.Time to recalibrate?
Conditions and priorities of organisational competitivity will change throughout time, so this is not a document to be stuffed in a drawer - it should be valued just like any other business strategy and reviewed on a regular basis, adjusting where necessary. Creating KPIs to easily measure against these strategic goals will allow you to recalibrate if necessary during annual reviews. These indicators could be based on factors such as the reduction in employee turnover; key vacancies filled internally; and employee surveys. These surveys will also give you an insight into job satisfaction, and indicate whether efforts need to be put in place to secure retention of key staff members.
12.Have a back-up plan
Circumstances change, and star employees are head-hunted by competitors and leave after being given an offer they cannot refuse, so it is important not to put all your eggs in the one basket. Don’t use all resources to mould one person into the perfect successor - have a contingency plan, be flexible and leave options open. Remember, this is not a conclusive contract.