When your organization is getting ready to implement their Succession Plan that they have developed, have they looked at the role that mentoring plays in the implementation? Does your organization have a mentoring program in place today that can be used to assist in this implementation?

I recently attended a business conference sponsored by the Saskatchewan Chamber of Commerce and this was a topic that seemed to come up in a number of conversations that I was involved in. What was quite evident was the concern around how to transfer the knowledge from the incumbent to the successor as an issue that everyone was struggling with. The other factor that most chose to ignore was the issue of the development of the successor’s soft skills which are crucial to their success in a leadership and management role today.

What we realized was that there were two streams that we needed to address in the implementation of the succession plan – both with a focus on succession development. The first is the transfer of corporate and job knowledge and the second is the development and growth of soft skills.

What we saw as we broke down each of those areas was that there is the possibility that a successor could in fact end up with two mentors as they continue to develop to take on the challenges of their new role. You are probably asking yourself why two? Initially we thought the same, but as we delved deeper into the implementation we saw two unique skills sets being required – one perhaps takes more time than the other. What we recognized was that a key part of the implementation was the development of the soft skills. If that part of the development phase was in order then the professional side – knowledge transfer would follow more seamlessly.

One thing that I should point out is that the incumbent may not have the skills for mentoring on a personal basis or for that matter the time. Their main concern will be to ensure that they have transferred their knowledge to their successor and helped prepare them for those business challenges that are forthcoming. Therein lays the rationale for two mentors. The main thing to remember is that we do not want to set the successor up to fail. The approach that your organization should take is to develop the successor and provide then with all the tools that they will need to lead your organization into the future. If this requires two mentors to guarantee that success then we should move forward with that approach.

Mentoring is a key success factor in the implementation of your succession plan and the development of successors.  Succession development enabled through the “power of mentoring!”

 

 

 

I had an interesting conversation yesterday afternoon regarding the hesitancy of a lot if not most organizations to succession plan. We analyzed why the delay in beginning that process. One of the things we offered opinions on was whether or not businesses understood that this is a process and it will take time.

Take for example a family owned business or a small to medium sized business whose owner wakes up one day and decides that he/she wants to retire. They then begin what they think will be a quick journey only to find out that the planning process and grooming of a successor can take two to three years. So then what happens? In most of these cases the doors close!

Don’t wait till the eleventh hour to begin the succession planning process – you are limiting your options.

Business succession planning should be a priority for every family business.

Sooner or later, everyone wants to retire. But if you own a family business, retirement isn’t just a matter of deciding not to go into the office any more. Besides ensuring that you have enough money to retire on, the whole question of what happens to the business becomes paramount. Who’s going to manage the business when you no longer work the business? How will ownership be transferred? Will your business even carry on or will you sell it?

Have you been putting off succession planning? Use these tips for family business succession planning to get the succession planning process underway and ensure a smoother transition from one generation to another.

1) Start business succession planning early.

Five years in advance is good. Ten years in advance is better. Many business advisors tell budding entrepreneurs to build an exit strategy right into their business plan. The point is, the longer you get to spend on family business succession planning; the smoother the transition process is likely to be.

2) Involve your family in business succession planning discussions.

Making your own succession plan and then announcing it is the surest way to sow family discord. “Opening a dialogue among family members is the best way to begin the process of a successful succession plan — one where close attention is paid to the personal feelings, ambitions and goals of everyone concerned” (Grant Thornton, LLP).

3) Look at your family realistically and plan accordingly.

You may want your first-born son to run the business, but does he have the business skills or even the interest to do it? Perhaps there’s another family member who is more capable. It may even be that there are no family members capable of or interested in continuing the business and that it would be best to sell it. Examine the strengths of all possible successors as objectively as possible and think about what’s best for the business.

4) Get over the idea that everyone has to have an equal share.

While this is a nice idea in theory, it may not be in the best interests of your business. Remember that management and ownership are separate business succession planning issues. It may be fairer for the successor(s) you have chosen to run the business to have a larger share of business ownership than family members not active in the business. Or it may be best to transfer both management and ownership to your chosen successor and make other financial arrangements to benefit your other children.

5) Train your successor(s) and work with them.

How can you expect your successor to take over and run your business successfully if you haven’t spent any time training him or her? Your family business succession plan will have a much better chance of success if you work with your successor(s) for a year or two before you hand over the reins. For solo entrepreneurs, sharing decision making and teaching business skills to someone else can be difficult, but it’s definitely an effort that will pay big dividends for the business.

6) Get outside help with your business succession planning.

There are many professionals that can help you put together a successful succession plan. There are even companies that specialize in family business succession planning, who will facilitate the process of working through both family and succession plan issues. TalentC has provided advice to business on different approaches that they can take.

If you want to pass your family business along to the next generation, putting off business succession planning is the worst thing you can do. A good succession plan can ensure that you have the funds you need to retire and that the business you have built continues to thrive in the hands of the next generation.

When I look across the landscape I see lots of hesitancy on the part of most organizations to engage in succession planning initiatives. There are obviously a number of “good” reasons for this, but I am struggling to come up with them.

When I look at the family owned businesses which are part of a the small to medium business market I see that there is a reluctance there as well to pursue any thought of developing a succession plan. Small businesses comprise more than 90 per cent of the total number of non-agricultural private firms in Saskatchewan. They directly employ one-third of the provincial labour force. That translates into 165,000 people. Compare that to the 113,000 employed by all levels of the public sector in the province. If we start to see the doors closing on these businesses it will have a huge effect on our economy.

Perhaps you’ll recognize some of these 6 reasons for what many are calling a succession planning crisis:

1. Difficulty delegating. Business owners tend to have strong personalities that make it difficult for them to relinquish control or delegate key responsibilities. The business owner may be performing several key functions that should be delegated. The owner is just too busy, and succession planning is relegated to the back burner. An effective succession plan will allow others to slowly assume responsibility for key functions and to become future leaders. Delegating important functions may be threatening to the business owner, making it difficult for him or her to hire and mentor successors.
2. Fear of change. Any change in the owner’s leadership role may represent a reduction in the owner’s perceived significance to the community, the organization, customers and suppliers. Change is resisted because the owner cannot accept doing anything differently.
3. The “Superman” problem. Business owners often perceive themselves as invincible and view discussions regarding succession planning as premature.
4. Concerns about ability to maintain lifestyle. Business owners often reinvest their profits in their business. Therefore, much of their net worth and income is directly tied to the business, making the business owner dependent on the business to maintain lifestyle.
5. Fear of conflict over choice of successor. Owners are reluctant to make difficult decisions regarding the selection of capable future leaders. Selecting key family members – or an outsider – may create so much intra-family conflict that the owner avoids the decision altogether. Delaying these decisions may have the unintended effect of causing one or more family members to leave the business. The family member who leaves the business may actually be the most qualified person to run it.
6. Concerns about treating children fairly. The concept of dividing one’s assets equally among children often conflicts with the idea of distributing assets equitably. Dividing an owner’s interest equally among children may seem like the right thing to do (and what children may be expecting). However, if such a division does not provide for a structure that will allow the business to prosper, the business may fail, and the company as well as the family’s future livelihood may be put at risk. Reluctance of the owner to address the prospective inheritance issues (and possible differences) of children working in the business vs. children outside the business is a significant impediment to succession planning. (Source: “Family Owned Businesses – Succession Planning Crisis,” by David C. Krock in “Succeeding Generations,” the newsletter of the University of Toronto Center for Family Business, Summer 2006.)

There are other options open to you if family members are not interested in the business. You should consult with outside resources on what other options there are. In a lot of these cases you can tailor a solution that meets your needs and maintains the life style that you are accustomed to. TalentC has developed a number of approaches that you can take and can provide you advice on those options. Our approach involves the use of mentoring as part of the solution.

Don’t delay making a solid business decision to begin the succession planning process. It is far better to leave a legacy than becoming a statistic of yet another closed business.

References:

1.      Larry Hiles  – Saskatchewan Chamber of Commerce

2.       Jeff P. Noble, BA, CMC
NOBLE Advice www.nobleadvice.com
Cambridge and Kitchener-Waterloo

How are we going to address the issue of our aging workforce that are on the eve of their retirement if we do not have plans in place to identify potential successors? How are we going to deal with the loss of knowledge that they will take with them when they leave? What might be a possible solution? Have we developed a succession plan that has our experienced worker transitioning their knowledge before they leave the organization? Are we thinking they may come back under contract? What are their plans for the future?

Let’s look at some of the recent statistics that are out there that may answer the question, “When should I retire?”

A study of more than 3,500 Shell Oil workers who retired between 1973 and 2003 found no increased death rate for those who retired at age 60 or 65, according to a report in the Oct. 22 issue of the British Medical Journal.

“There is a widespread perception that early retirement is associated with longer life expectancy, and that retiring later leads to early death,” the researchers wrote. “The possible health benefits of retirement, such as reduced role demand and more relaxed lifestyle, have been postulated to improve longevity among people who retire early.”

Not so, the study found. The death rate for workers who retired at 55 was 37 percent higher than for those who kept working until 65.

“Health has an inevitable effect on survival,” says Colin Milner, chief executive officer of the International Council on Active Aging, in Vancouver, Canada. “But many people underestimate the importance of their job when they give it up, he added.

“We tend to build our lives around our work,” Milner said. “When we are no longer working, we can lapse into lack of activity, and that can contribute to bad health.”

“To be healthy, retirement must be active,” Milner said. In his experience, retired people who plunged into new activities enjoyed their lives more, and were thus healthier. One study showed “that older adults who volunteer to help others can reduce their risk of dying prematurely by 60 percent,” he said.

An active retirement can help to keep the individual physically and mentally active. It can provide:

• Access to an additional income to supplement retirement funds.
• Opportunities to allow pension funds and savings to grow for a few more years without using them.
• Access to employer funded health insurance and other retirement savings benefits.
• The chance to pick a job with full-time or part-time hours that suit the individual.

According to a new study in the Journal of Occupational Health Psychology published by the American Psychological Association, workers who began a part-time or temporary job or became self-employed after reaching retirement age suffered 17 percent fewer major diseases than those who ceased working entirely, and were generally less likely to experience physical decline.

Retirees who maintained part-time or temporary employment status were found to be less prone to high blood pressure, diabetes, cancer, lung disease, heart disease, stroke, psychiatric problems and arthritis. They were also less likely to undergo “functional decline,” which refers to how sharp and capable they are in doing day-to-day activities.

“What the study does is reinforce a few things we already know,” Colin Milner, CEO of the International Council on Active Aging, recently told HealthDay News. “If you are involved in society and have purpose in life, whether that’s through a job or as a volunteer, your health and your mental outlook is much better than if you’re not.”

The research clearly shows that engaging in activities after your formal retirement has financial and health benefits. I know from my own experience that seeing people that stay active mentally and physically in the later stages of their life, their quality of life is better than a sedentary life style. This also gives them a chance to leave a legacy.

A key role for our aging workforce that is struggling with the question, “what am I going to do” is to think about mentoring our youth – our future leaders of tomorrow. Some organizations I have talked with are looking at bringing back their retired workers to assist in the mentoring of their younger workforce as part of their succession planning process. How awesome is that? To be able to help prepare someone on a personal and professional basis to lead us into the future – what better reward is there! Now when you add to that being able to pick when you want to work, how much better could it be!!!!!

One such program that assists in this great idea is a newly launched program called ThirdQuarter.  This is a program that is slowly making its way across Canada and has recently launched in Saskatchewan. I am a huge fan of the program and have registered on their site and have posted a job opportunity for an experienced worker to help me out.

When should I retire? I would suggest that you shouldn’t as we need you to assist with succession planning initiatives and help shape the future of our country by mentoring our future leaders of tomorrow!

References:

1. British Medical Journal – October 22^nd issue.
2. Colin Milner, Chief Executive Officer of the International Council on Active Aging, in Vancouver, Canada
3. The Journal of Occupational Health Psychology published by the American Psychological Association
4. http://www.thirdquarter.ca

How do we find leaders in our organization to lead us into the future? How do we succession plan those we have identified – what is the process that we will follow to ensure that they are prepared for their new role?

What will be some of the challenges that we will face as we try to address these two issues?

One of the challenges is the impending talent shortage. There has been a lot of research done heralding the talent shortage that we are anticipating to peak in the year 2015. There are already 61 countries that have declared a talent shortage due to an aging workforce and a declining birth rate.

One of the key elements with the talent shortage is to find skilled resources. All too often we can find a warm live body to sit in the seat, but what is going to be the benefit to our organization with that approach?

This article looks at two elements that will be influenced by the pending talent shortage; leadership, and leadership succession planning.

Organizations that are forward thinking will see the need for having strong leaders at the helm as we go forward. The challenge that we face is what attributes make up a good leader. Can leadership be taught? If we find a person that we feel has most of the attributes we are looking for, can we succession plan that person for a key role in the organization? How do we ensure that they are prepared for that role?

So what are some of the leadership attributes that we look for?

Six Essential Leadership Attributes:

1.      Set High standards – the high standards that you set for yourself will inspire others to follow in your footsteps. You must always be cognizant though that not everyone can perform at the same level. As a leader you must be able to recognize the capabilities of your team and leverage their strengths, and work with them to enhance their performance in other areas.

2.      Live your standards and mentor those that follow – Learned behaviour play a large role in the development of your team. As members of your team observe your behaviours over a period of time – mirroring will start to take place. This will not take place over night. I am reminded that it takes 10,000 attempts at a task to become skilled in that task. Mentoring is a skill that great leaders have and use in the development of their followers.

3.      Create and share a vision – imagine taking your vehicle and heading off on a long trip, not knowing where you were going or how you were going to get there. Now for some, that may sound exciting, but in the world of business a journey like that can be costly to an organization.  As the CEO of an organization you need to create the road map that will symbolize the journey your organization will take including the how you are going to get there and when. You need to ensure that all your staff understands how they play a role in this journey. Far too often staff is not involved in this process and they are the ones that have to deliver on the vision.

4.      Make the hard choices when necessary – being a leader is not all fame and glory. There are times more often than not, where you need to make some hard choices/decisions. There will be times when those decisions are not pleasant ones. Good leaders will be respected for their abilities and their decisions no matter what the situation is.

5.      Be visible and out front – leaders to be respected must be visible. An unseen leader is one that is not followed. I can recall times during my early leadership days of sitting in my office and working away. The only time I left the office was if I had to speak to someone about a performance problem. Staff identified my attendance in their work area with someone being in trouble. I changed my behaviour and would take 30 minutes every morning to go to each work area and converse with the staff. I saw a huge change in the productivity level of my team.

6.      Instill hope in those that follow – we all need hope. Hope that our work is appreciated and contributes to the long term success of the organization. We have hope that there will be recognition and reward for the work that we perform. Good leaders will provide that hope and continually be reinforcing the behaviours that will make the organization and the people a success.

Can leadership be taught?

“The truth, we believe, is that everyone already has all of the capacities necessary for leading, so keeping up with the times is only a question of recognizing this innate ability and acting on. Granted, it requires faith not only for those in positions of authority but also for everyone else. Each of us needs to look within ourselves and see how we answer the question, “Am I able to lead?”

Funny, isn’t it? The natural response to this question is, “Of course I can lead!” This is not to say that individuals cannot learn how to lead more easily or more serenely – that is the art of leading, and it comes from a process of discovering how to be most effective. But it all starts with turning your back on the conventional wisdom and seeking to discover what you already know about leading. Then it is a question of just taking the most obvious step.

So can leadership be taught? No! But then again it doesn’t have to be taught. Leading effectively does not require learning something you don’t already know but simply looking inside to discover your own answers to the question of how to express your natural gifts.”

You have found someone in your organization that has most of the attributes that you are looking for in a leader. You realize that some leadership attributes are in everyone, but not all will become great leaders. You want to assist this person in being the best that they can be. Your organization then embarks on a structured succession planning or succession development process to ensure that your employee is properly prepared for their new role. The succession planning process will include the identification of competencies required for this new role, an assessment of the current competencies the employee possesses and a learning plan to assist in closing the competency gaps with distinct time lines for each of the milestones. Communication of this plan with the employee is crucial to the success of preparing the employee for their new role.

Your employee progresses through the program very well and prepares to take on the new challenges that this role will present. They are confident in themselves because of the time that you have taken and the organizational investment in their personal and professional growth. A recipe for success!

References:

1. THE SIX ESSENTIAL LEADERSHIP ATTRIBUTES – Copyright 2005 by John Di Frances

2. Can Leadership Be Taught – Robert W. Gunn, Article – November 2000 – www.Accompligroup.com

An article that I found recently has reinforced the position that I have taken regarding the need for succession planning or succession development as I prefer to call it. This article confirms the need for all organizations, big or small to begin the succession planning/succession development process.

Business Need

In most cases, succession planning/development focus on three main areas. First, it addresses the needs of the organization as senior management ages. Too often, the enterprise neglects succession planning/development and does not have people available who are fully prepared to assume the top posts. Although large organizations are at risk, the problem can prove especially severe at small companies, which often flounder, and sometimes collapse, after the founder or CEO leaves. At many businesses, having little or no succession planning/development wreaks havoc when the organization’s leader retires.

Second, succession planning/development help an organization to prepare for an unexpected event. It is often difficult to plan for the unimaginable. Although it is not feasible to plan for every possible scenario and particularly for the loss of several key leaders at the same time, it is entirely realistic to map out a chain of command and understand who will assume control if and when a key executive is lost. Recent world events illustrate how important succession planning/development is. When the World Trade Center attacks took place, dozens of companies lost key executives, including CEOs and CFOs, who were on the planes or in the buildings that were destroyed.

Finally, succession planning/development ensure that an organization has the right personnel to function at peak efficiency. Today, many organizations strive to identify key objectives and business goals and shape a work-force accordingly. Not only does succession planning/development serve as a way to create an organizational hierarchy, but it can also help organizations conduct an inventory of human capital and better understand gaps. It can also help organizations manage change in a more holistic way.

Many CEOs and senior management teams fail to develop in their successors the high-level skills and competencies they will require. Too often, leaders are too absorbed in day-to-day issues, overly focused on short-term results or unable to adapt to change.

Another problem is that even the best training program cannot always supply the talent needed to run an organization at peak efficiency. This is particularly common at companies that are growing rapidly. Sometimes, it is essential to find talent from the outside. But this, too, can pose a formidable challenge with the recruiting process and the time to properly train the successor. Most companies can ill afford to take a year to replace key personnel and the skills they offer.

Strategically Focused

Although successful organizations usually focus on training to develop leadership from within the executive circle, they also understand that it is sometimes wise to look outside for particular skills and knowledge. Of course, the more prominent a position within an organization, the tougher it is to find a suitable candidate. Thus, some turn to outside consultants to manage recruiting and, sometimes, the entire succession planning/development process. Consultants can provide objectivity and help develop a strategic plan that encompasses all levels of the enterprise.

In fact, organizations both large and small are increasingly looking to outside expertise to bolster their capabilities. Consultants can provide specific expertise that matches an organization’s requirements. By assessing best-in-class candidates and understanding an organization’s existing internal talent pool and needs, it is possible to identify specific skills, competencies, and candidates from within and across industries ranging from medicine to financial services, semiconductor manufacturing to freight shipping.

Ultimately, this allows the enterprise to focus on its core business while the partner analyzes organizational needs. A consultant or outsourcing provider can track wages and ensure that its client is paying appropriate compensation and benefits to attract and retain top-notch talent. It can also ensure that hiring takes place at the right time. For example, if an organization knows that the CFO will retire within the next year, it can hire a highly qualified candidate well in advance and seamlessly integrate him or her into the company. Without such planning and coordination, the new executive might not be willing to make the leap to a new company.

Framework

There is no simple template for putting a succession planning/development process in place. Every organization is different, and each organization must develop a succession plan that fits its specific needs. Management must guide this process and the human resources department must oversee it. And both must focus heavily on organizational culture—what exists and what is required in order to succeed. Effective succession planning/development also demands assessment systems that can measure the development of skills, competencies, and knowledge within the enterprise.

Summary

Succession planning/development is a complex task that requires constant attention and ongoing resources. Successful organizations devote considerable time and resources to mapping out skills and competencies so that they can hire and train appropriately and achieve a distinct competitive edge. Best-practice organizations also prepare for unforeseen events and the potential loss of key executives. Finally, these organizations view succession planning/development as an ongoing process rather than an event that must be addressed every year or two.

A growing number of companies are recognizing the value of succession planning/development, and they are expanding the concept from one traditionally used to manage only senior level positions to encompass managerial positions across the organization. They are also taking succession planning/development beyond organizational charts and using it as a comprehensive change-management tool that helps the organization identify gaps in talent and fill them more effectively. Ultimately, a comprehensive succession-planning strategy helps businesses leverage the full value of human capital.

Is the need to develop a succession development strategy focused only on large corporations where there is a need to identify and prepare successors for key roles?

Apparently not, as the founders of Nature’s Path Organic have realized the need to prepare our next-generation leaders. In their particular situation they are a family owned business and they have been forwarding thinking for a number of years. They have made sure that their children, their successors have received a good education and have been provided the tools they will need to be successful entrepreneurs.

Research has shown that many business owners have not developed an exit strategy. As they continue to age and are making plans for retirement, the daunting task of who is going to take over the company remains. In the case of Nature’s Path Organic, they are fortunate as their children have embraced the opportunity to continue the family business.

If you are a small business, perhaps family owned have you prepared your exit strategy? Have you taken the time to prepare the next-generation leaders that will continue with your legacy?

You are the member of a Board of Directors and your Chief Executive Officer (CEO) has just informed you that he/she is planning on retiring in the next 3 years. You never thought this day would come and as a result organizational panic begins to set in. Is this scenario fact or fiction?

In a recent article published in The Globe and Mail – Report on Business they identified this very same problem. So how do you deal with this issue?

Succession planning or succession development as I prefer to call it is the key in this situation. It is very clear that organizations need to begin the planning process ahead of time to allow for the proper transfer of knowledge to a successor. The current CEO needs to mentor his or her success over a period of time to ensure that they are ready to take the reins of the organization.

This article looks at a transition plan that spans three years and that is something that I agree with. You may have a plan in place but do you know how to implement it? The key to success in these situations is the development of the successor – hence the term “succession development”.

Does your organization have a succession plan in place? Have they implemented that plan with clearly defined learning plans for the successor? How is the knowledge that the incumbent has going to transfer?