Succession Planning is a Two-step Process

Succession planning is a two-step process Jerry Osteryoung Helping Small Businesses August 28, 2013 Jerry Osteryoung Helping Small Businesses No one can be certain what tomorrow will bring, so it is critical that every entrepreneur or manager have a successor in place. This is typically a two-step process: First, you have to find the right individual, then you have to provide training to ensure the person is prepared to handle the demands of the role. Over the years I have seen companies make tragic errors in both selection and training of their successors. Too often, candidates are selected based on how hard they have worked and their loyalty to the company rather than how competent a leader they will be. Clearly, loyalty is a great thing as is familiarity with the company and culture. These are both things that might lead you to choose someone from within the company, but the deciding factor must always be which candidate has the skills necessary to lead the firm. Businesses often pass to the children of the founders. This succession strategy has a pretty poor success rate of only 15 percent. I think this is because, in some cases, successors are chosen simply to keep the business "in the family." However, familial ties do not automatically qualify children to run the business, and these decisions can be deadly. In these cases, the businesses would have been more successful if they had looked at all qualified candidates. Once the successor is chosen, the next step is making sure they are ready to take over the leadership role. I was recently talking to the CEO of a nonprofit about this very issue. She had already chosen her successor and now wanted to know what training she should provide. I encouraged her to think about the skills he already had and what skills he would need to take over her role. After much discussion, we determined he needed training in soliciting funds, understanding financial statements and motivating staff. We developed a plan with objectives and brought in a consultant to work alongside the CEO during the coaching process. I believe an outside consultant is always a good idea because they tend to be more objective. They can also help facilitate relations between the successor and the current CEO. Generally speaking, I think managerial skills should be on the list of training provided to successors. I have found that these need work in the majority of cases. In one case, a firm assumed the incoming CEO had all the training necessary. He had been a manager with the company and was simply being promoted. In his former management role, however, he never had more than four employees reporting to him. He now had more than 25 reports plus all the additional duties of CEO. It turned out to be just too much for him. In all probability, this firm would have been better off if it had provided additional management training to help prepare him for the demands of his new role. Now go make sure you select the most qualified candidate to take over your company and provide the person the training they will need. You can do this! Columnist Jerry Osteryoung is a consultant. Contact him at jerry.osteryoung@gmail.com Credit to www.Tallahassee.com