Large organisations and multinationals will have a succession plan that helps them to deal with the inevitable changes in key personnel that affect all businesses. So, if company succession planning isn’t a feature of a family-run business, then it really ought to be. This is because family businesses tend to be smaller or medium-sized firms. As such, the lack of a leadership succession plan can be even more critical for the business if one or more key personnel leave for whatever reason. What should people running family businesses do about succession planning nowadays, and which succession planning strategies make the most sense when family members are involved with the running of an enterprise? Read on to find out.
1. Get to Grips With Your Entire Business
To begin with, there is no single succession planning model business decision-makers can turn to that will allow them to put a succession management plan in place. Instead, succession planning needs to be tailored to the sector the business works in, its organisational structure and its personnel. As such, the succession planning process will necessarily be different every time. However, this doesn’t mean that a succession plan template cannot be used so long as it is adapted to the particular aspects that make one family business different from another. In many cases, deploying succession planning software will help family firms to come up with a plan that works but also obtain one that is also geared around the particular circumstances they face. Remember that the idea is to focus on all of your personnel, not just the ones working in key roles today. This way, you’ll be able to identify who is most important and would be missed most greatly if they left. Emphatically, this does not necessarily need to take into account their professional title. In other words, a key performer in a marketing team could be more important to a family business in terms of succession planning than the sales director, even if they currently have a more junior role.
2. Think Strategically
When creating a succession planning document, focussing on people rather than roles is important. So too is thinking strategically in terms of family business succession planning. Why? Because merely identifying who is crucial to the business is not enough on its own. People who run family businesses also need to think about what they’d do if person A or person B were no longer working in the firm. What’s more, it is important to think about strategies that could cope if employees A, B and C all left at once for any reason. Remember that family-run business owners won’t necessarily get any warning of such changes. People get sick, retire early, are headhunted or simply want to do something different all the time. Offering more money or different working conditions isn’t thinking strategically. Instead, work out whether someone else could step up into the role that has been vacated. If not, recruiting someone who could cover down the line would be an example of a succession plan strategy. There again, training staff to be able to step up if the time comes is also useful. One of the main benefits of succession planning isn’t just that it helps with business continuity in a time of potential crisis but that it also identifies previously untapped talent.
3. Identify Star Performers
Any good succession platform that is used to come up with a plan will not just look at team players according to their most obvious merits but will drill down deeper to give a more rounded view, as well. Especially in family-run firms, extroverted or well-connected employees tend to get promoted until they reach the level they can cope with. However, star performers might not always get the attention they deserve. A thorough succession planning exercise will collate performance metrics from multiple sources of data, including KPIs and appraisals, so that a more rounded and better-informed picture can be gained.
4. Face Up to Big Decisions
Sometimes, a succession plan will shed light on how well, or otherwise, family members perform in a business. If a relative works well but isn’t suited to step up in a succession role, then it is best to face up to this. Even family firms have to deal with harsh realities sometimes. There again, one of the benefits of succession planning is that it may highlight overlooked skills among family members working in the business. Where retraining, professional development and culture changes are needed to ensure succession plans will work, it is advisable to have the conversations with employees that will bring them about. Few employees like change for change’s sake, but if business owners contextualise alterations, so employees realise it is in their best career interests, this can make all the difference in preparing the business for the future. In short, it is best to be open about the company’s succession planning, even if that means some people might feel resentful.
5. Consider Sideways Growth
So far in this discussion of succession planning, the succession planning model being described has focussed on people stepping up into recently vacated roles. In short, this means looking for the most valued members of staff who could be promoted to cover for the star performers that might be lost at any time. However, this is not the only way of looking at things. In other words, another approach to succession management is possible. To be clear, it is not always the case that family business owners need to find members of their workforce who are capable of being promoted into more important positions. Instead, they can look at who would make a good sideways move. Perhaps the person running the customer service team has the necessary organisational skills to manage the production office or vice-versa. If so, in this example of a succession plan, getting the two current incumbents in these roles to mentor one another would be a good idea.
At Tallard Management, our services are geared up to help family firms with their succession planning processes, from strategising to implementation. Having no plan to cope with the departure of one or more star performers can be critical for any organisation, but it is especially tricky for family-run businesses. As such, beginning the succession planning process sooner than later is highly advisable for all such enterprises in business today.