Can the family members in your business answer the question, “What is the succession plan at our company?” If they can, you’ve shared your plans. If they can’t, either you haven’t shared it or you haven’t put much thought into it yourself.
A succession plan benefits you and it benefits your family business. It gives you clear direction, but more importantly it boosts the self-esteem of your family and non-family staff members by helping them know what’s next. For the key players in the family business, it’s a proactive measure that aligns the development of top talent with the future leadership needs of the company.
Succession Planning, What is It?
Succession planning is all about developing strategies for identifying top talent and cultivating the future leaders of your family business. It also addresses the inevitable changes that occur with employees, such as resignations, layoffs, fires, illness, disabilities, retirement, relocations, and death. Succession plans ensure that a family business is prepared for variables by identifying workers, family and non-family alike, who have demonstrated high-levels of potential by training them for advancement into critical roles within the company.
This is an essential process that all companies should employ, but it’s often overlooked. In the context of a family-owned business, it’s especially important because it ensures clarity between ownership roles and the responsibilities of family members. If you have a family-owned business, here are 8 suggestions to start succession planning the right way:
1. Put the right personal development plans in place.
It can take time to determine the best candidate for a specific leadership role, but don’t neglect this part of your plan. Even if you don’t see the need for a replacement anytime soon, preparing a family member to fulfill an important role creates the safety net your family business needs.
You never know when accidents or illnesses will strike, especially with older family members, so incorporate personal development plans in advance. Meaning, identify and train high-potential family employees before you need them to step into leadership roles.
2. Keep your options open.
While you may feel the obvious successor is the person who’s now second in command, that doesn’t mean to disregard other promising family members. Keep a lookout for other employees who are displaying the skills necessary to thrive if promoted to a position of higher responsibility. Ignore their current title and look for signs of potential.
3. Train your peak performers.
Let’s face it, not everyone has the best work ethic, not even family. When you identify your company’s top performers, provide them with mentoring relationships, training, further education, and job shadowing.
These will help them develop the skills necessary to gain new skills while refining existing ones. Remember, technical acumen isn’t the only thing to look for. Your best leaders will also need strong interpersonal skills, outstanding verbal communication skills, tact and diplomacy when handling others.
4. Test people while on vacation.
One way to do a trial run is to test family employees while you’re on vacation. This is a great way to let a potential successor take the reins for a bit. This employee will be able to gain experience, see how they like being in charge, and it will prepare them for a bigger role if they’re up for it.
5. Be aware of talent gaps.
Once you’ve determined which family employees would be good successors for your family business, note any talent gaps. Use the succession planning process to help you understand where to focus your recruiting efforts next.
6. Ensure responsibilities match skillsets & desires of family.
Want the best possible scenario and to maximize productivity? Ensure that each family member’s roles and responsibilities match the person’s individual desires. It’s no secret that people do best when they enjoy what they do, so don’t shortchange your family by requiring them to fulfill roles they don’t take pleasure in.
7. Create clarity between ownership roles and responsibilities.
When it comes to ownership roles and responsibilities, keep things clear. This way, no one is wasting time by doing each other’s jobs. By clarifying ownership roles and responsibilities, you’re reducing conflict and allowing people to accept full responsibility for their roles in the company.
8. Define exit strategies & options where needed.
Every business owner will eventually reach the point where they either wish to, or have to leave a family business because of their health or age. This could mean passing the torch to a junior family employee, selling the business, or closing it down. These are all “exit strategies” and every family business should define their exit options sooner than later. This way when the time comes, it’s a manageable event, not a company crisis.
If you’re planning on advancing yourself, rest assured, you’ll need a successor too, one who’s enthusiastic to fill your shoes. Ultimately, the end result of succession planning is a well-oiled machine that churns out one favorable outcome after another, including staff retention. At AdviCoach, our coaches can help your family employees know you value them for their contributions, and help you identify the ones who are eager to realize their full potential in the family business. Contact us to get started.