I think it’s important to understand that succession planning is very different for small entrepreneurial firms than it is for major corporates.
In a large enterprise you will have a team around you. Some members of that team will be operating strategically while others will be tactical. It is from this team that you will draw when looking to develop one or more successors.
Clearly, a strong, experienced team will provide a richer source of potential candidates. Having been a senior director in several global firms I have noticed that it is always the strong managers that clearly understand that their team’s success makes their own success.
Unfortunately, it is often very different for entrepreneurs and managers of smaller firms. All too often they find themselves working in their business rather than working on it. This then leads to a vacuum forming around them because they haven’t had the confidence, foresight or trust to build a team to support their toils and assure their future.
As an entrepreneur and business leader assisting international companies with technical due diligence, I’ve encountered many owner managers who are, in effect the total embodiment of their company. Without them, the business would fail. This, of course, is ok if you just want to run a lifestyle business which simply provides you with a living, but it’s not all right if you have other more ambitious plans. If you want to create an organisation that has growth potential you need a support team around you and you need to create an exit strategy from the outset.
As an entrepreneur you may have to do everything yourself in the early days. But, as your company grows, you will come to need help with aspects such as marketing, the financials and procurement. It’s at this point you should start thinking about possible candidates that could eventually succeed you.
Build a team of people you know you can trust and who share your vision and objectives. Make sure there’s someone who can look after the day to day running of your company so you’re free to concentrate on building your business.
You might try to envisage what would happen if you were to take a month’s holiday. Would the business survive? If not, what changes do you need to make to make sure that it does? I work on the basis that someone in my team handles the day-to-day activities, while I work on things that are at least three months in the future. In that way, I am building a natural successor, someone capable of ensuring the continuance of my business while also looking at, and building for the future. With this strategy you will find that natural leaders often bubble to the surface – and those natural leaders can easily be moulded to be your successor.
By putting a succession strategy in place early on you’ll be able to extract maximum value from your business and leave behind an organisation that has an assured future ahead of it.