By Bridget McCrea
Mention the phrase “succession planning” to Dov Baron and you can almost hear him wince through the phone. That’s because from what this author of Fiercely Loyal: How High Performing Companies Develop and Retain Top Talent, speaker, and president of consulting firm Full Monty Leadership in British Columbia, sees out in the business world, very few companies are doing succession planning the right way.
And while some are just ignoring the need for it altogether, others look at succession planning as a simple handing over of the reins to the next generation of family ownership. This may have worked well 10 or 20 years ago, but things are different today, says Baron, who knows that succession planning conversations often go like this: “Listen son, would you like to take over the electrical distribution business for me?” “No dad, I’d rather go to San Francisco and learn how to write computer code.”
Baron says those conversations no longer work because younger generations are less interested in just “taking over” as a natural rite of passage, and more interested in being a part of a purpose-driven organization that does more than just sell products and services to electrical contractors. And while the latter may still be the electrical distributor’s core business model, Baron says succession planning should be more focused on creating bonds with both family and non-family members and determining which of them would make the best possible successors.
Pick the wrong people for the job (i.e., a niece who doesn’t really want to work for the company, let alone run it), says Baron, and you could wind up sabotaging your company and driving away top employees and customers. To avert this problem, Baron says distributors should create a clearly defined, well articulated story that focuses not only on company successes, but also on the trials and tribulations of running a distribution firm. “Develop a story,” says Baron, “that accurately portrays the purpose and culture of your organization.”
Making Succession a Priority
Defined as a process for identifying and developing internal people with the potential to fill key business leadership positions in the company, succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as these positions become available. And while the concept sounds simple enough in theory, it’s one that distributors rarely address in any systematic manner. Smaller companies, for example, tend to be so tied up with other organizational challenges that thinking about who the next leader will be can quickly fall off the priority list.
But putting succession planning on the backburner is a mistake, according to Baron, who says most efforts fail due to a lack of “bonding” and relationship-building with the potential candidates. This bonding is especially important in companies that have withstood the test of time due to their founders’ commitment and deep emotional connection with the firms that they created from scratch. “The next person to take over isn’t necessarily going to have that same attachment,” says Baron, “and may just feel obligated to take over.”
To overcome this obstacle, Baron says founders need to dig deep and figure out exactly why they started their companies – knowing that it probably wasn’t just to sell products and services to electrical contractors. “Sit down and share openly and vulnerably with your key people,” Baron says. “Suddenly, it stops being an electrical distribution firm and it becomes your life’s purpose.”
Consider, for example, the CEO that, after going through the routine “I founded this company to serve customers,” rhetoric, landed on his true driving force, which was to create a purpose-driven company that loves all and serves all. “As a boy who was mixed race and growing up in South Africa, this CEO wasn’t accepted into the white or black communities,” says Baron. “Then one day a priest took him in and gave him a position as a goalie on an all-white soccer team; he showed him acceptance and was willing to put himself on the line for someone who didn’t fit in.”
And that, says Baron, was the CEO’s driving purpose in business. After sharing that purpose with his employees, the CEO was not only able to get people excited and engaged, but he also grew the company’s revenues by 500 percent over the next three years. Electrical distributors that need help with this exercise should start getting introspective about their originating purposes. Why did you create this company? What was going on in your life that made you choose electrical distribution? How have those founding values translated into success over the years?
As you answer these questions, take them to the next level by asking yourself: Okay, so what was really going on that pushed me in this direction? After going through three or four deeper layers of this question, you’ll get to your core values and reasons for running your business. “Go deep with it and really get to the founding values,” Baron says. “We love to think of ourselves as logical, rational beings, but in reality we’re all driven by our emotions. Those unconscious emotions that drive us are usually the root cause of why we do things in the first place.”
Starting the Second Story
After pinpointing their core purposes, leaders need to sit down with their core people and convey those thoughts and aspirations in a way that truly inspires one or more of these individuals to want to step up to the plate and take over (either now or sometime in the future). Much like the CEO whose introspective process led to a 500 percent increase in business, distributors that can paint an accurate picture of their core beliefs will be the ones that most effectively handle the succession planning process.
Baron calls this the “Fully Monty Story,” for its raw and revealing characteristics that go beyond just the “B.S. rhetoric and mission statements that no one really cares about.” “You want them to see the integrity in what you’re doing and the entire story behind it,” he concludes. “When you do that, you’ll evoke the other person’s emotions and get them to start running a second ‘story’ that runs parallel to yours.”
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 CEO, succession, succession plan, tED