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Succession Planning

by Subomi Plumptre

You have spent years building a company. Your pioneer staff have become experts in their respective fields; overseeing critical revenue centres. During the build up to your current status, you opted for a lean and affordable HR structure. In doing so, you failed to recruit and groom successors. Now you’ve reached a growth and innovation ceiling.

Your team members are inundated with day-to-day tasks and do not have time to nourish new business ideas. There are meetings to go to and operations to run. In some client project meetings, they’re the oldest people in the room and the participants wonder, “Don’t you have junior staff”?

You really tried to recruit new people, but on-boarding entry-level recruits wasn’t easy. You wonder if the current generation is made from the same stock as the last one. Their work ethic and attention to detail just isn’t the same. Now, your star players are bogged down with minutiae; correcting basic errors by interns who are awed by them. Your staff are flummoxed by the rigours of mentoring and training, as there’s no documented guide. They weren’t formally ‘trained’ on the things they do, so they don’t know how to train others. They rose on grit and self-motivation, not formal instruction.

Now, you have two classes of staff – top managers and neophytes. There’s no middle management buffer – no crop of successors who understand your culture and are competent enough to handle daily operations.

If you’re going through the scenarios I’ve just described, there’s hope. There are two solutions you may explore. One is organic. The other is not.

Organic Succession

If you run a relatively young company, try to bring in new recruits or interns at least, every three years. That way, your organisational culture will be progressively passed from one generation to the next.

Create clear job descriptions, deliverables and schedules for each role. Write things down. This makes the on-boarding of new staff easier. You are able to spot which of your new staff can interpret written guidelines with minimal supervision and thus, has managerial capacity. Documenting processes and information, also ensures nothing critical resides in the heads of a few legacy staff alone.

Tie a percentage of the remuneration of old staff to how well their subordinates perform when they are not around. This will ensure they take training and succession seriously.

Create clear development paths for staff; identify their learning needs and then invest in training.

Develop reasons why staff should keep working with you – culture, brand name, responsibility, autonomy, flexibility, profit sharing, ownership and so on. Implement them.

Inorganic Succession

If you’ve been in business for a while, but do not have experienced managers, you may need to recruit them from outside. Determine whether you’re looking for managers to work for you or, partner with you.

If you need people to work for you, be sure you can pay them. The best minds have the luxury of choosing where they work and for how much. Can you compete with multinationals and large corporations for talent? If you can, then by all means, recruit them.

If you’re looking for people to partner with you, then be sure to create flexibility and autonomy. Let your new staff be in charge of their units and be responsible for profitability. In which case, they may receive a basic allowance, while making the bulk of their income from profit sharing, bonuses or equity. For your new staff to earn a seat at the decision making table of the larger organisation however, they must prove themselves over time. Existing staff should be rewarded for their loyalty and dedication.

Profit sharing, bonuses and equity, allow you to attract staff you would otherwise have not been able to afford. But in using these attraction strategies, ensure you do not overpay for talent or get stuck with a staff who talks a good game but doesn’t deliver. Tie pay to performance.

Meet Micromanager Mike

Let me tell you about Mike. He’s a Manager at a mid-sized company. He’s weary in soul & spirit.

In charge of a department of twelve, Mike bears the ultimate responsibility for his unit’s performance or lack thereof. He’s played this role for ten years and is now trapped by his own success. The unit can’t function without him. Mike is proof-reader, quality controller, chief negotiator and chief accounting officer, all at the same time.

It seems Mike needs to practice a concept I once learnt in project management class – Management by Exception. Essentially, Management by Exception states that a company cannot run effectively by micro-management. Instead, managers should define the scope within which team members may operate, and then step in only when they go out of scope. Managers must learn this art, or else they’ll be stuck overseeing minutiae; never moving on to bigger and better things. Worse, the company won’t be able to afford to let them grow, because if they change roles, everything will unravel.

Mike needs to ensure that his team members have clear job descriptions and stated deliverables (with review milestones and timelines). That way, Mike only needs to track output and not process, giving his team breathing space to work uninterrupted, until they reach each milestone. Eventually, star team members will come to the fore – those who repeatedly attain milestones with minimal default. For those reliable team mates, Mike can then extend the timelines between milestones, spending even less time supervising them.

Mike must penalise those who miss milestones. They drag down the productivity of the entire system, frustrating achievers. He should also keep a leader-board of attained milestones, so the whole team can see how they’re doing relative to one other. Competition is healthy and name & shame works. Keeping score reduces resentment when you promote star achievers. It’s clear to everyone that they deserved it.

At some point, Mike should also take stock of which team members have administrative capacity and so, can be groomed for succession, while he moves on to other assignments.

Mind the 10-year Gap

As an entrepreneur, you have about 10 years from the inception of your company, to create the next generation of managers. You must actively do this as a strategic imperative, if you hope to have peace and prosperity in your later years.

I know succession planning can be unsexy and tedious, but if you fail to actively groom managers, here’s what will happen:

1. You won’t be able to travel or enjoy your wealth, without worrying about whether your company will burn down in your absence.
2. You will correct typographical errors onr every document and proposal before it is sent out.
3. You will attend client meetings with people younger than you, who subtly let you know you’re not supposed to be there.
4. Your business expansion will be limited because you don’t have enough competent people to drive new product lines. Hiring experienced talent from outside, will cost you an arm and a leg. There might also be a culture clash.
5. When you’re not around, key decisions can’t be taken and so, clients won’t want to take business meetings with your junior staff.
6. Your company will atrophy from lack of new ideas and generational insight.
7. Your organisation may not live after you die.

If you haven’t already begun, please begin succession planning now.

How to Prepare for Succession

If you’re thinking about succession, a good starting point is to ask your subordinates to write a detailed list of everything you currently do that they can’t do, or are not proficient in. Then, develop a custom curriculum incorporating each item. Now, deliberately train your staff on those items. Sometimes, you may need to hire to fill unbridgeable skills gaps.

Sometimes, to build your subordinates’ self-confidence, get them to apply for fellowships, to participate in executive development programmes or even to facilitate training sessions within your company. In doing so, they will build their own networks and become comfortable in their knowledge. Mentoring should also be deliberate and have clear outcomes.

If you don’t document everything, including contacts and procedures, you’re not building an institution or enabling your subordinates to function without you.

If when you’re on vacation, your clients are still calling you or sending emails, then they don’t trust your subordinates’ competence. Sometimes, you need to let your staff attend to those emails and calls. Even if they fail, they’ll learn to take responsibility. You’ve got to help them to understand that the buck stops with them in your absence.

Please take succession seriously unless you plan to handle minutiae when you’re older. And when you find great managers, please pay them well, take an interest in their lives and develop them. You may choose to train multiple people to reduce key man risk as some people may leave. So, create a strong pipeline of managers.

 

I hope these ideas have been useful. I wish you success.

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