Have you ever had these thoughts?
“I lay awake at night and wonder if my business would be okay if something were to happen to me.”
“The business is too dependent on my sales. If something were to happen to me, would the business survive?”
“If something were to happen to me, there is no one in my company that could do what I do to keep the business running.”
These are three quotes from business owners who responded to our question, “What do you worry about the most?” If you find yourself answering with some version of the responses above, keep reading.
The common thread in these responses is worry about what will happen to the company if something unexpectedly happens and the owner isn’t able to run the business. What all of them want is to develop a succession plan to address this concern and they are so busy working “in” the business that they don’t have time to do want they know, in their gut, is the right thing to do.
What might a succession plan look like? Here are a few ideas that might get you started on making sure your company has a succession plan.
1. Assess where your company might be vulnerable in your absence.
In the second quote, this business owner is the highest producing salesperson. If he were not there, who would bring in the sales? All too often, the business owner is most successful selling his/her services and is also the sales manager. A succession plan, in this scenario, would include a plan to hire, train and ramp up another salesperson or two. If you are also the sales manager, it might also include hiring someone else to manage the sales team.
2. Understand how dependent the business is on you and build a team of accountable managers to share the leadership of the day-to-day operations of the company.
Create a list of the responsibilities you hold and the decisions that others depend on you to make. If you have managers and you don’t have confidence in delegating decision-making to them or letting go of those responsibilities that should be held by your managers, you have some work to do. The goal is to have managers you trust to run the day-to-day business so that you, as owner, can focus on what you do best. In all three companies the succession plan was to build a leadership team of the key managers who are held accountable for managing certain aspects of the business and who, collectively, are able to think and act in the best interest of the company in the owner’s absence.
3. Pay attention to where you are resisting letting go or wanting to keep control and put the right processes in place to stay on top of the business as you empower others to step up and be responsible and accountable to the team.
The most difficult part of any succession plan is for the owner to let go of the need to be involved in all the decisions being made in the company and to trust others to do “as you would do.” The goal is not for the owner to abdicate responsibilities and decision-making but to build in the right processes so that the owner stays on top of what is going on in the business and managers have clear boundaries and criteria to guide their success.
4. Put the right people in the right management seats and move managers out quickly when it isn’t working.
All too often, successful doers are put into management positions with little to no training and are not always successful in the management position. The owner, out of loyalty or a perceived need for that person’s expertise, keeps the person in the management position to the detriment of the company. The owner then feels s/he has to “hover” to compensate for what the manager isn’t able to do. A successful succession plan includes key managers who you trust, whose management skills and subject-matter expertise you have confidence in, and who share your passion, values and commitment to the success of the company.
Do you have your succession plan in place? If not, stop putting it off. Start with #1 and call us if you get stuck. If you have a succession plan, yet parts of it aren’t working as well as you’d like, we’re here to help you figure it out.
The bottom line is worrying doesn’t do any good if you don’t take action to alleviate the worry!
Stay tuned for our next blog on building succession plans for your key managers and employees.
PRINCIPAL, TRANSFORM INC.