Succession Planning

Succession planning is a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company. Through your succession planning process, you recruit superior employees, develop their knowledge, skills, and abilities, and prepare them for advancement or promotion into ever more challenging roles.

As an Entrepreneur, Have You Lost Your Authentic Swing?

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Businessman ThinkingI love the 2000 movie The Legend of Bagger Vance.

Remember it? Directed by Robert Redford, the movie was based on Steven Pressfield’s 1995 book with the same name. The actors include luminaries Jack Lemmon, Will Smith, Charlize Theron and Matt Damon. This was Lemmon’s final movie which makes it even more important to many people.

In 1931 (during the depths of the Great Depression), the City of Savannah, GA sponsors an exhibition golf tournament with great golfers Bobby Jones, Walter Hagan and the town’s golf prodigy and hero, Rannulph Junuh.

As he caddies, wise Bagger Vance (played by Will Smith) provides sage advice to help Junuh recapture his “authentic swing.” They talked very little about the fairway, sand traps or greens. They talked about post-traumatic stress, the meaning of life, guilt, regret, a broken heart, giving up, accepting responsibility and hiding. You know…light conversation (lol).

As many golfers of today can tell you, finding one’s authentic swing in golf is not just a matter of repetition. Golf is a mental game as much as it is a physical one. When a golfer’s muscles are tight from being angry at work, his/her slice or hook returns on the golf course. When a golfer’s optimism or confidence is compromised, the short game on the green becomes another nightmare. An executive’s capacity to make great strategic decisions is another version of one’s authentic swing.

Presidents of privately held mid-sized companies often don’t have time to play golf or have another similar outlet that offers feedback on whether the president is still centered. It is impossible to maintain your authentic swing when you aren’t centered. Often the all-important feedback comes in the form of poor business results. The president’s loss of his/her authentic swing is taken out on the business.

Sometimes executives just keep showing up when he/she knows he/she is “just not right with the world”. Continuing to show up is important, but just going through the motions can solidify bad decisions (a hook or a slice). Finding what keeps you centered is worth the effort. An executive coach could be your Bagger Vance.

Founders: Seriously Consider Replacing Yourself as President

OK…Steve Jobs comes to mind.  But, he kept coming back, plus this blog is about midsized privately held companies.

The Founder’s skills are often related to a concept, a product, or a better way to serve an industry he/she knows well.  If the Founder’s concept “proves out” then further investment in growing the business makes sense. But are most Founders great at both external dynamics and internal operations? Usually not. The typical scenario is that production oriented employees are hired with as few business management positions filled as possible. As growth happens, more procedures and systems are needed so the left hand knows what the right hand is doing, customer satisfaction can result and actually be measured, and changes can be cued for improved efficiencies and profitability.  And the Founder feels torn between selling bigger customers and trying to help improve day to day process. Growth slows…and the company has “plateaued.”  In some industries this happens as early as $3 Mil/yr. In others, it’s $10.

Visit www.TheGrowthStrategist.com to see my series of short video blogs about

The Top 9 Causes of Plateaus” and “How to Grow Beyond Plateaus.”

I’ve seen Founders hire operations oriented professionals, which can work.  But if the operations person doesn’t have enough authority, the plateau becomes even more stubborn. Employees test who is really in charge, whine to the Founder, say they want the business to grow but often resist learning new skills or taking on more responsibility.  I have lost count of the number of times I have heard Founders regret “hiring too low” when they reached this point.

I had dinner recently with one Founder who finally brought in a strong operationally oriented President.  They are delighted to work together.  The Founder’s title changed from President to Founder. No kidding.

The journey from being a large small business to becoming a small big business isn’t easy. There will be glitches once in a while.  So what.  They’ll work through those moments. But now the Founder’s hands are untied.  He can focus on bringing in multi-million dollar clients and not worry when employees request “early dismissal” on Wednesday July 3rd. (Are you kidding?! Give me a break!)                                                                          

Founders: Seriously Consider Replacing Yourself as President

[video post] Attract Young Employees…and make it worth doing

Attract Young Employees…and Make it Worth Doing

Supervising Generation Y employees (born 1977 – 1990) and Millennial employees (born 1991 – ) poses several challenges.  One of my clients, who has become fairly frustrated, says:

“It isn’t just that younger employees have short attention spans and lack social skills and basic manners.  The biggest challenge we see if that today’s young people exhibit an odd mix of insecurity AND cockiness.  One minute they are convinced they know everything and should be in charge.  The next minute, they don’t know very basic aspects of the work to be done.  They simply don’t know what they don’t know.”

“As a result of that one factor, younger people think they deserve fascinating high paying positions with a degree of independence and authority…before they have done anything to earn those jobs. And if they can’t easily land one of those rewarding jobs, they actually give up and settle for entry level roles at fast food restaurants.”

If your business is experiencing something similar…don’t ignore it. More and more executives are starting to realize that the disconnect between various generations will soon stunt their business growth and profitability.

Many younger people crave the opportunity to create. Installing a highly participative interdisciplinary approach to product development is one way to reach and retain young employees.  No matter what their core jobs are, younger employees can often provide new insights and ways to utilize technology.  If your Baby Boomer managers can get past the negative/provocative manner used by Generation Y and Millenials to make suggestions (“I don’t know why you don’t…”), your business can end up with some exciting ideas. If the cross functional product development groups are then expected to go far enough with their analysis that they can present actual business proposals, your younger employees have the opportunity to learn what they did not realize they didn’t know…and have a reason to stay.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

[video post] Ah…Family

Ahhh, Family

The brother came to quarterly board meetings, but that was about it. He happily pulled his share of the profits from the family business for years and years and years.  Amazingly, he became tired of having to go to board meetings and asked his siblings to just buy him out which they did.

The sister had an impressive title.  According to the company’s organizational chart, she oversaw four departments. The reality was that professional managers had been brought in to really run the departments.  They each kept her informed just in case, but no real value resulted from their meetings with her.

The younger brother was president, and he wanted the business to truly grow, be successful, and stand for something.  He developed a strategic plan, invested in multiple locations, and occasionally tried to motivate his sister. One day, the sister came into a management meeting and loudly declared, “I don’t want to be held accountable by anyone,” and the sibling president was put on the spot.  He could have just fired his sister, bought her out, and kept growing the business.  But instead, he invested hours and hours, days and days, weeks and weeks to get a fair valuation, find buyers, and negotiate the best price.

The parent and each sibling ended up with a great deal of money…multi-millions.

So now, no one in the family is talking to the younger brother. He got them more money than they could have ever imagined. He was the only sibling actually working.  The reasons?  “[He] had embarrassed his siblings.  [He] should have tried harder.”

The sister spoke up recently and actually asked to help.  She didn’t want her children to think that she didn’t work/have a job or career.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

Are You Inadvertently Losing the Option for Succession From Within?

Recently, we’ve been seeing more and more leaders of midsized companies struggle with succession and feeling forced to consider affiliation with larger entities because they have gaps in their leadership and no way to do succession from within.

Assessments are revealing that rigid work schedules and lack of choice in benefits may have played larger roles in sabotaging their retention, leadership development, and succession from within than they would have ever imagined.  Schedules and benefits impact every generation of employees.

In general, folks from the “Baby Boomer Generation” value self actualization, learning, and making a difference.  Their parents taught them to work hard and stay with one company.  But their life experiences have taught them that loyalty is no longer rewarded. Often referred to as the “Sandwich Generation” Baby Boomers need time to take care of grandchildren or an aging parent with Alzheimer’s disease.  Rigid office hours can chase Baby Boomers away.

“Generation Xers” can seem more cynical and self absorbed. Think about what they have experienced in their lives:  Presidents who lie. Wars with unclear mandates. Corporate corruption. Long term employees losing their pensions. Plus television, video games, computers, and cell phones going faster and faster and faster.  It makes sense that Gen Xers take a shorter term view and don’t trust long term promises. Why would they want equity in a company if they don’t trust that it will even exist in a few years? They value their personal time but are insulted if their bosses assume that means they won’t work hard.

Think about the “Radio Generation.”  They want to be and stay retired. Right? They have a strong work ethic but already put in their time. Right?  They just want to reminisce about the past and aren’t interested in learning anything new. Right?  It’s the younger people who want flexible schedules and benefits. Right?

Not necessarily. Life expectancy is extending longer and longer.  Many senior citizens view using their brains as very important to staying healthy.  I know several seniors who definitely have the capacity and interest in continuing to work.  They may not want to start the work day at dawn.  They would like a little time in the morning for a doctor’s appointment or a cup of coffee with friends at the local McDonalds. And the benefit package they want/need is long term care insurance.  Their dependability and loyalty can be worth a great deal to a company.

Are your scheduling policies and lack of a cafeteria plan for benefits sabotaging your succession plan?

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

 

Disillusion

Disillusion.  What a fascinating word. How many Baby Boomer business owners do you know (perhaps yourself?) who have become disillusioned?

The recession and the long period of uncertainty that has followed. It looks like the underlying causes of the implosion of the financial industry in 2008 haven’t been addressed let alone resolved.  Government officials haven’t risen to the occasion and done the jobs citizens pay them to do. Disillusion.

International competition.  Most Baby Boomer business owners recognize globalization.  But how does a privately held US based company compete with a business based in China where the hourly workers are paid so much less and work so many more hours without overtime rates involved? Disillusion.

Advances in technology.  Oh it’s great to participate on a SKYPE call with your grandchildren who live on the other side of the country. And Wii bowling is fun. Getting movies through Netflix for your flat screen HD/3D television is a pleasant perk. But on the business side, technology keeps raising customer expectations and the EXPENSE, the constant training, the disruption, and the bottomless pit of change related to IT can be very discouraging to a Baby Boomer owner of a privately held midsized company.  Disillusion.

If it is a family owned business, the next generation doesn’t seem to want to learn leadership skills or work hard.  They don’t seem ready or as interested in taking over the family business.  An unfulfilled life plan. Disillusion.

There are solutions to this situation.  They all begin with the Baby Boomer owners doing some self examination to admit how disillusioned they have become.  Plus, in many cases, they would need to be willing to be a whole lot less stubborn. Less pride and less secrecy. The rules have changed and continuing to run a business in a state of denial won’t help.

My prediction?  There will be a SPIKE (huge rise) in the number of (formerly midsized) businesses being dissolved in a few years. Unaddressed disillusion leads to dissolution. 

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieve accelerated growth with sustained profitability® through opportunity & resource analysis, strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.         

Create an Optimally Sized Business Instead of Fretting About Succession

If you are the majority owner of a business and feel yourself shutting down when the subject of succession comes up, consider the following layers:

  1. YOU – Reflect first on the results of appointments you (and your significant other) have had with your personal financial planner, physicians, estate attorney, and accountant.  When will you want to retire or reduce your workload? What is your life expectancy? What income will you need? Where will you want to live? Will you have caretaker responsibilities and expenses? Do you have long term care insurance? How much could your other income sources produce? How much do you need, want, deserve from the business? (These may well be 3 entirely different numbers.)
  2. THE BUSINESS – Reflect second on the future of the business. In many ways a company is a living breathing entity. Think about the economy, the customer base, product life cycle, momentum, etc. What will the company need to be resilient? Profitable? Significant? (These too may be 3 entirely different answers/numbers).
  3. PEOPLE – Reflect third on key individuals who drive the resilience, profitability, and significance of the business. What reward have they earned? What return have they been promised? What help will they need as you step back and some money is paid to you?
  4. THE COMBINATION – What would  the optimum size of the business be to:
    • pay you what you deserve
    • ensure that the business is resilient, profitable, and significant
    • provide key people what they have earned and been promised
    • have leadership and skill sets in place to handle transition
  5. HOW – What strategies would achieve optimal size, resilience, profitability, significance, and fulfillment of obligations to key people (including you)? Maybe you should consider acquiring a complementary company? Maybe you should consider merging with a competitor?  Will the company need to hire a President? Would an ESOP retain key employees? Perhaps improved marketing would be sufficient.

This sequence may seem obvious, but it is NOT what most people do.

Many business owners end up with a scramble of facts and emotions about themselves and other people.  Loyalty. Fear of the future. Legacy.  Entitlement.  Guilt.  Disappointment.

Especially during uncertain economies (NOW), many owners approach succession – related analysis from a pessimistic almost cynical viewpoint. I have seen owners work themselves up into horrible resentments based on arguments they have had with themselves in their own minds.  Without assistance, they never reach question # 4…let alone question # 5.

The optimally sized business meets its obligations to the owners, its key stakeholders, and its future. When there are honest answers to questions 1-3 , the optimal size becomes self evident and can guide strategic decision making focused on the market place, product differentiation, productivity, etc. with far fewer negative assumptions, resentments, and fear.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her current service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.  Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.             

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