The issue of succession planning is rearing its head in two of my client’s businesses at the moment and the resulting problems have prompted me to hit the keyboard. A lack of understanding for this one can prove very expensive or worse still, extremely destructive to your lifestyle.
Those of you in small businesses which lack proper management structure and who intend to stay running small business can probably skip the rest of this and move on to read another article — otherwise, read on . . .
Both of these clients had used my company’s services to structure and systemise their businesses some years ago and the owners had worked hard under our direction to achieve their aim of placing their business under management while they enjoyed their lives. As part of the process we had identified staff for supervisory and management development and an effective leader had risen who was eventually placed in charge of the business as ‘Operations Manager’. In both businesses it had taken about two years to get to the point where the owners were redundant and could enjoy their lives.
This is the difficult point in a restructuring project for us — there are two parts to the process of placing a business under management:
Create the structure, train the people and put the basic, core management systems into place.
Put additional maintenance systems in place to make sure the core management systems don’t unwind, and a steady stream of carefully trained supervisors and managers are ready, waiting in the wings, to step up into any key roles and use those core management systems.
Resist short term thinking
There is a tendency for business owners, once they are freed from the prison of day-to-day running of their businesses, to halt the restructuring process at the end of stage one and not move on to stage two because they have achieved their aims and see further expense as unnecessary. The holiday may only be short lived if steps are not put into place to maintain what has been created.
In both cases I am referring to, the owners placed an effective leader in charge of their businesses and once trust was established they ventured off to do other things and only kept an eye on the monthly profit statements, which continued to indicate the financial health of the business. Unknown to them, there were dark, Machiavellian things happening in the business that they were not aware of because they had not put the necessary maintenance systems into place to know what was going on from arms length.
Beware of human nature
It seems to be a sad aspect of human nature that if a person is given rapid management development and then placed in the senior role without some form of auditing of what is happening from the owner, they will often move to shore up their newly gained position of power and influence by ‘shafting’ all the talent below them and making themselves indispensable. Eliminate all contenders to the throne, so to speak. At its simplest this consists of denying subordinate staff the same training and development as they received; or it can extend to actively setting-up and getting rid of people who are seen as a threat.
This process is often very subtle and escapes the notice of the owners who are revelling in their new, fully funded freedom — after all, the customers are happy, and our accountant is happy, and the staff seem to be happy — what could possibly be wrong? Well, not much at this point but the crunch is coming.
One day, perhaps after several or many years, either the manager looses the plot and the owners remove them, or the manager announces that he/she is leaving for greener pastures. It is then that the sickening realisation dawns on the owners that the systems that were so costly and time consuming to put into place now reside only in the outgoing manager’s head and no other staff have been trained to use them. Things start to unravel very, very quickly from this point on.
If you get in this situation there is no win
Now the owners have a problem from which there is no win. Either they give up their lifestyle and their freedom and return to run their business (which they have possibly lost touch with and forgotten how to do), or they go on to the open job market to try to find a manager who can pick up the pieces, which is expensive and very, very risky. I get a phone call about this time. It starts with: ‘I’ve got a bit of a problem I’d like to talk to you about. Do you remember how you trained all my people some years ago? Well . . .’
Go back to the old adage: ‘Work on your business; not in it’
We teach that an owner or a manager should concentrate on working ‘on’ their business, not ‘in’ it. One of the key maintenance issues for anyone who owns or manages a business should be: ‘How do I ensure a steady supply of supervisors and managers who are ready and trained to step up when we need them?’ If you don’t do this you will find yourselves either having to recruit outside you company for all your key staff needs — which is again very difficult, expensive and risky in today’s skills shortage — or you will find yourselves promoting ‘warm bodies’ into key positions and suffering the consequences: loss of sales, high costs, staff turnover and stress.
A critical question I would ask you to ponder is this: ‘Even though I am happy with the way my business is running now, what would happen to my business if either I or a key staff member was suddenly unavailable for a period of time? This is the issue of succession planning.