Additionally, did you know that personnel specialists could help you navigate the people side of succession? Far from being trivial considerations, the personalities, feelings and motivations of the people involved are important issues for successful succession planning and ongoing management. Like finances and legalities, they require expert handling to ensure optimum long-term results.
A succession plan is as individual as the personalities involved. Yet important lessons can be learned from observing the successes of others. In one case, an owner divided his printing business between his two children. He encouraged his daughter, who had a knack with money, to get a financial education and eventually she became his company’s Chief Financial Officer. His son went to Ryerson University to study graphic arts management and he secured employment outside of the family business before joining his father’s company. Ultimately, the son became Chief Executive Officer of the family business.
This example highlights two important people-handling strategies in succession planning. Number 1: Starting from the ground up is not always necessary to build future leaders. Besides getting an appropriate education, it may be best if potential heirs gain perspective and work experience from other industry-based companies or firms outside of the print industry. Number 2: Avoid the “boss’s kid” syndrome. If you’re handing over your business to your children, they need the same skills you would seek if you went looking for an outsider to take over your company. Your children should enter the business at a level of authority and responsibility appropriate for their background and their salary and advancement should be based on the same criterion that applies to any other employee. This makes it clear to everyone (including your offspring) that they have earned their place in the company.
In another scenario, a business owner died suddenly before her son finished his business education. Fortunately, he was resourceful and fast-tracked his training through seminars and contacts — especially suppliers and employees he could trust to give him proactive suggestions. By including them to be part of the company’s development, he made the company thrive.
The lesson here is to attach respect and value to experience. “Anybody can read the manuals,” says Myrna Penny, managing director for PrintLink. “What’s important is the instinct that goes with it. You can instill in your children that instinct is an important trait, but you can’t teach it to them. It only comes with an enthusiasm for the business and experience.”
Consider Profile Testing
Profile testing is an effective way to sort through your emotions and figure out if your succession plan is on track. Adopted from psychometrics, a branch of psychology, profile testing measures psychological variables. “It helps you find out if the person you’re grooming to succeed you is suitable for the position, as well as uncovering aptitudes that can be strengthened by training,” Penny says.
Data obtained from profile testing can also be used to redefine existing employees’ job descriptions to capitalize on their strengths. Benchmarking employees is very helpful when hiring new staff so that their aptitudes and personalities complement and balance existing staff.
According to Penny, the costs to administer and interpret the test results is recovered in the protection it provides to the business’s future and the investment of time and money in hiring and training staff. “If you do train someone who is not an appropriate successor, you’re not doing anyone any favours. Sometimes it’s better to sell the company and give the kids the cash to let them get involved in something they’re good at.”
Other succession scenarios include children who want to assume ownership of the company but prefer hands-on positions in production or sales, rather than senior management roles. In such a case, or if there are no children (or none who want to carry on the business), your task becomes that of hiring the best possible leader to replace yourself.
Succession strategies are not a one-size-fits-all solution but rather the unique aspect of each situation that will determine who the best possible successor will be.