I was captivated this summer while binge watching HBO’s hit series featuring the Roys, Kendall, Roman and Shiv, as they battled it out for control of the family company. As an HR professional, there were so many cringe worthy scenes as the patriarch pitted his kids against each other, and I was glued to my couch.
In my consulting practice, I occasionally work with clients that have successfully transitioned to the next generation without all of the drama that the TV show depicts. The stars were aligned in terms of:
- Interest in running the company
- Skills and abilities needed to run the company
- A clear plan to develop the next generation of leaders
- A culture of accountability that retained non-family members
- Effective communication and conflict management strategies that moved the business forward without driving a wedge between family members, or family/non-family employees
However, more often than not, the stars are not aligned.
To this point, I was recently asked the following: “So, none of my children want to take over the family business. Now what?”
If you don’t have any heirs, or if your child has the competence of Roman Roy or the emotional intelligence of Kendall Roy, you are not alone!
Here are my top tips to plan for a succession planning strategy to help you build a pipeline of leadership talent that will give you flexibility.
Conveniently, having a solid management team is the answer that allows you to transition the company to family members or employees, to sell the company to extract your hard earned value, or to provide you with more balance and freedom to take a well deserved vacation!
- Build the right structure - Ensure that you have analyzed the core processes/activities, and have created 3-7 positions that are responsible for key aspects of the business with clear measures for success. Two popular structures:
- CEO/COO - There is a visionary leader who has a “strong #2” that runs the operations. Everyone else reports through the COO. This structure is fine, but be sure to recognize that many people from the next level should be brought into the fold.
- CEO/C-Suite Executive Team - This structure has a small group of people (4-6) that report to the CEO. This is more people management work for the CEO, but spreads out accountability.
- Build the right team today - Recruit people into these roles that have the right skills and experiences, but also share the values that you hold dear. Getting the fit right is key. Once you get the team in place, don’t stop there. Invest in processes and tools such as weekly meetings, quarterly strategy sessions, a dashboard, conflict management and team building workshops, coaching, etc. Over time, build in redundancy so that there are two people that can do everything. Even the things that you do! This helps ensure continuity if someone leaves, or if you want to take a vacation.
- Create a talent/leadership development program - At least annually, check in with everyone to find out where they want to be five years from now, and then figure out how to get them to where they want to be.
- Build the right team for tomorrow - Annually, review each key position and think about who would fill it today and 3 years from now. Large organizations have a bench of 5-10 people and then have rigorous training programs. This is more difficult for small companies, and sometimes the funds aren’t available for excessive duplication, and there are fewer people from which to select. However, this exercise is key to ensuring that you have a plan in place to maximize your bench strength and development. Once the leader is within 5 years of retirement, they should be thinking about succession. Ideally, there is a high performing management team with multiple people willing and able to step into the role. If not, this is the time to recruit someone from the outside, so that they can have 2-3 positions prior to assuming the top job.
Want to dive deeper?
Here are some free resources we can provide for you:
- Succession Planning whitepaper
- Leadership Development whitepaper
- Organizational Growth whitepaper which includes common positions/structure from “garage stage” to “mature company”
- Subscribe to our free monthly newsletter to get our monthly blog, additional resources, and to see profiles of available people looking for their next opportunity. (And, we will make connections to our profiled people at no charge to you, or them! It’s free.)
Want to get your succession planning house in order?
Here are some ways that we can help:
- Succession Planning Checklist and one-hour conversation to talk about your succession vision and how to get there. - $250
Book an appointment to discuss your HR or recruiting needs, or feel free to reach out at (734) 747-2936 to schedule a conversation about building better teams for your organization!
Stay tuned!
Next month I’ll be musing about the topic of Benefits. Do you have a question that I can answer - send it to me at Amy@AmyCellTalent.com.
