18 Aug The Issue of Succession Planning

If you’re happy with the way your business is running now, what would happen if you or a senior employee was suddenly unavailable for an extended period? Ignoring the importance of succession planning can be damaging to both your business and your lifestyle.

One of our clients has worked hard under our guidance to place their business under management so they could enjoy the fruits of their hard work in getting their business established. We identified staff for supervisory and management development and an effective leader was eventually placed in charge as ‘General Manager’. The whole process took a couple of years to get to the point where the owners could be completely hands-off and focus on their own personal needs which included raising a family and exploring other business interests.

For us, this is a challenging point during a restructuring project. The first part of a restructuring project is to establish the business structure, train the owners and key staff and put the core management systems into place. The second part is to put maintenance systems in place to make sure the core management systems don’t unwind. An integral element of this second stage requires a steady stream of well-trained team leaders and managers to be ready to step up into key roles and use those core systems.

Once free from the day-to-day running of their businesses, many business owners tend to halt the restructuring process at the end of stage one because they feel that their aims have been achieved and any further expense isn’t necessary. What they don’t realise is that their newfound freedom will be short lived if steps are not taken to maintain the structure and systems that have been created.

So, the owners placed an effective leader in charge of their businesses and focussed on other things while keeping an eye on the monthly profit statements, which continued to look good. However, things were happening in the business that they weren’t aware of because the maintenance systems that are necessary to control a business from a distance weren’t put in place.

Self-interest and the potential for damage

Sadly, if an individual is given rapid management development and then placed in the most senior role without some form of auditing, there will be a tendency to shore up their position of power to make themselves indispensable. This might consist of denying subordinate staff the same training and development they received; or it could extend to actively getting rid of people they see as a threat. This sort of thing may not be noticed by the owners who are enjoying their new freedom as it can be subtle and take place over several months or even years.

The dilemma

At some point in future the manager decides to leave. It is around this time that the owners realise the systems that took so much effort and expense to put into place now reside only in the outgoing manager’s head and no other staff have been trained to use them. Things can unravel quite quickly form this point.

Now the owners face a lose/lose situation. Either they forfeit their lifestyle and freedom to step in and run their business again (which they may have lost touch with), or they try to hire a manager from outside their business who can pick up the pieces, which is very expensive and risky.

The takeaway

One of the most important maintenance issues for anyone who owns or manages a business is: ‘How do we generate a steady supply of team leaders and managers who are trained and ready to step up when the need arises?’