Succession planning is a critical linchpin in building the bench strength of a business into a positive long-term future, as well as a key element of business risk management. Most of the business literature on this particular subject focuses on succession planning as an exiting strategy. This focus is a strategic blunder.
The emphasis on succession planning as an activity to be considered and implemented toward the end of the business life cycle is wrong-headed. Such emphasis represents a short-sighted perspective, characterized by a significant lack of strategic thought and intent. It is particularly surprising, given the current demographic changes and trends in the market.
Some of these key trends that need to be considered from a corporate team building and strategic perspective, in analysing both the internal and external environment include:
- an aging population
- labor and skills shortages
- the emergence of Generations ‘X’ and ‘MTV’ into management roles, and
- an increasing number of women assuming management and leadership roles in business.
Business owners and managers need to be open to employing people who are better than they are and different to them. This willingness becomes a crucial attribute in underpinning productive succession planning. Effective business owners and managers regard such planning as an opportunity for ongoing growth and development for themselves and their businesses.
Thinking about succession at the recruitment stage is therefore critical for the ongoing success of the business, as its principals and managers move toward leaving their company for whatever reason.
Successful business owners and effective managers are committed to bringing the next generation of leaders on from the very outset. To that end, the three critical strategic decisions that must be made are to:
- recruit learners
- create a developmental culture, and
- inculcate leadership as a function that delivers results.
One – Recruit Learners
Aligning succession planning in business begins when people are first recruited into the company.
In the employment of new people, demonstrable technical skills or experience, managing with and through others, and verbal and numerical reasoning capabilities are all-important elements to be considered.
But by far, the most critical factor to consider is that the people being recruited into your business must be avid learners and open to ongoing learning and development. No other single attribute will prove as meaningful in their prospects for long term success.
Two – Create a Developmental Culture
The developmental culture that we want to create in our business environment is underpinned and informed by the people at the top. The people at the top, therefore, must themselves be lifelong learners. Furthermore, they must embody the desired development culture of the value based business by being open to new ideas, by listening intently and by incorporating different ways of looking at things into the business environment.
They must model the development that they want to encourage in the people around them.
One of the risks in creating this type of business environment is the loss of good people to other businesses. It happens. People do get “poached,” and they do move on. On the other hand, when engaging in the risk management of adopting this approach, one must ask the following question:
“What would happen if we did not develop our people, and they decide to stay?”
In the end, a developmental culture in a business attracts talent like a magnet, since prospective employees see the business as one that offers more than merely a paycheck. On balance, this capacity to attract good people should more than offset any risk of losing them.
Three – View Leadership as a Function that Delivers Results
Succession planning is reinforced throughout the value based business by the pragmatic philosophy that leadership is taking responsibility for getting things done, not a position that is held.
Organizations are much flatter than in the past, which means that the hierarchy is now created by the alignment of the Mission, Vision and Values of the business, as well as by its strategic business objectives.
Leadership is a function. Leadership is the ability to see a gap between what is and what should be and the willingness to take responsibility for closing it. Leadership can also be the ability to create a gap between what is and what should be, where such a gap is necessary to propel the business forward, and, then, taking responsibility for closing it.
By defining it this way, leadership becomes an activity that can be learned, demonstrated and taught, at any and all levels of your business.