By Bridget McCrea
Succession planning is one of those tasks that business owners know that they need to do, yet very few actually take the time to identify and develop internal employees and managers to fill key leadership positions. Mired in the day-to-day responsibilities of running a business, current leaders don’t always have the time or energy to get involved with such strategic, forward-looking projects. As a result, succession planning falls by the wayside until it’s too late.
“Avoiding succession planning is not only profit-draining, but it can also be the death knell for companies,” says Mark Faust, principal at growth advisory firm Echelon Management International in Cincinnati and author of Growth or Bust! Proven Turnaround Strategies to Grow Your Business. “As a result of poor succession planning, a company’s best people leave. In the worst situations, when an unexpected vacancy in leadership presents itself, it is not unheard of for companies to crumble.”
To avoid these challenges, distributors should engage in regular succession planning centered on identifying and prepping experienced and capable employees to assume leadership roles as they become available. As you work your way through this process, be sure to factor in these eight critical succession-planning elements:
- Create a corporate ladder that actually challenges employees. Don’t assume your succession candidates are happy with their current positions. “Good people are looking for ever-increasing and continuing challenges,” says Faust. Keep this in mind as you explore your options and identify potential leaders. “When a good employee knows that there is a long-term career path for him because he has actually discussed it and understands what is expected from him to be worthy of future more challenging opportunities,” says Faust. “He is more likely to be motivated and to remain with your team – rather than going off to your nearest competitor to find a challenge.”
- Don’t expect your future leaders to be turnkey and ready to go. Just because that executive position isn’t vacant today doesn’t mean you can’t start cultivating future leaders for success. Faust suggests using ongoing cross-training strategies (training warehouse and distribution personnel on how to approach basic sales and service tasks, for example), mentoring, and other development efforts to fill the pipeline and gauge interest in future job advancements. This approach can also help distributors address last-minute crises. “When someone gets sick or injured,” says Faust, “you’ll be able to handle it without missing a beat – instead of scurrying to only make a poor effort at meeting the challenge.”
- Make succession planning an organizational initiative. Unless a mandate comes down from on high for every leader to identify his eventual or potential replacements, says Faust, it’s just not going to happen. The more insecure a person is, for example, the more likely he or she will be to feel threatened about the conversation of their replacement. “Make the discussion and planning mandatory and companywide,” Faust suggests, adding that dialogue about the potential candidates, plans, and alternatives should be discussed in small groups “where everyone has some familiarity with the people and responsibilities.”
- Don’t turn succession planning into an HR project. While it may be tempting to turn the job over to the folks who typically recruit, hire, and fire employees, Linda Henman, Ph.D., president at business consultancy Henman Performance Group in St. Louis, says succession planning is a process best led by the company’s current CEO and/or president. “The backing really has to come from the top,” Henman points out, “and be supported by and headed up by the company’s current leadership team.”
- Start using regular performance reviews now. The number of executives and managers who don’t undergo regular performance reviews consistently surprises Henman. “If you don’t keep score over time, how can you possibly decide who will fill key positions in the future?” she asks. Avoid this trap by using regular, routine performance reviews across the entire company. That way, when the time comes to select successors to current leaders, you’ll be able to quickly review the worker’s long-term history and track record and use that data to assess his or her leadership potential.
- Assess the leadership roles first – then fill them with candidates. Take a look at your firm’s current leadership ranks, its plans for the future, and what additional and/or replacement leaders will be needed to carve out that success path. Next, look at the roles, skills, and behaviors that people will need to in order to fill out those positions. “Chances are, there will be people on board who can fill those roles,” says Daniel Lock, principal at Daniel Lock Consulting, and organizational consultancy in Waterloo, Australia. “They might need a bit of help, direction, and development – but they can fill future jobs.”
- Pay attention to the hidden “gems” in your current workforce. The warehouse manager who has been with the company for 20 years may have never exhibited signs of wanting to run the organization, but that doesn’t mean he’s not capable of it. In fact, you may have several individuals onboard who would make excellent leadership candidates and not even realize it, says Lock. “Even the best people will need coaching and training to get them primed and ready to manage and/or lead,” he points out. “What makes a salesperson the best at selling, for example, may not necessarily translate into being a great sales manager.”
- Don’t wait until it’s too late to take a proactive stance. If you eschew perfectionism around the effort and begin immediately you won’t regret it. “Odds are you will not only begin seeing immediate benefits,” says Faust, “but you’ll be making additional decisions that will impact sales and profitability down the road.”
As electrical distributors continue to shake off the negative effects of the most recent recession and get back into growth mode, Henman says now is the time for them to renew and/or kick off their succession planning strategies. “A lot of companies have stagnated for the last four years due to lower sales and empty customer pipelines,” says Henman. “As a result, many of them are now four years behind where they need to be with succession planning; waiting is no longer an option.”
McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at firstname.lastname@example.org or visit her website at www.expertghostwriter.net.Tagged with tED