By Joel Strom
Over the past several months, this column has been devoted to operational succession planning, a process that ensures that you and your organization not only have a will, but that you have a way to make the future more secure. Here is a quick review of the first three steps:
1. Establish the vision to determine where you want the plan to take you.
2. Assess the current situation in the organization to determine the size of the gap between your vision and the reality.
3. Develop the plan to close the gaps and reach the vision.
The final step, implementation, is where the ideas and the plan are turned into action and reality.
Getting started
The entire organization does not need to be told that you are implementing a plan that will allow you to sell the company in five years for a large sum of money. However, if this is your plan, and to accomplish it you must build a management team to move you out of the daily operations of the company, then it may have to be shared with people on the team.
One of my clients, who has decided that he wants out of his business in five to seven years, has shared this with his key people. They know that they are part of the plan and that they must grow into a strong management team if they are going to be able to run the business without him. There is a clear understanding of roles and succession.
Because of this, sharing the plan did not create unproductive infighting and jockeying for position on the team. At this time, the information has not been shared with the rest of the staff and operating employees. It is still too early in the process, and their perceptions could cause undue stress and concern.
One of the first tasks in the implementation process is deciding whether to share the plan with the organization. This is a decision that you will have to make based on your situation and the culture of the organization.
Action items and review
Operational succession should not be considered a short-term endeavor. It should be done early enough to allow sufficient time to truly implement the plan. It needs to become an ongoing part of the management program and must be managed like any long-term project. It can’t start off with a flurry of activity, just to fade away as newer, more exciting things come along.
Your plan should include action steps and timelines and deadlines for accomplishing them. Some people work well with these. It’s all the discipline they need to keep them on track toward their vision. It may be more difficult for those who have a hard time staying focused on shorter goals or seeing a short project through to completion.
In some situations, the management team can provide the push needed to keep the process on track. The members have a vested interest in seeing this process through to completion. Without your total commitment to the program, you will either tire of the team’s insistence and prodding or the team will get weary and eventually give up.
Depending on how you view this, it could be either a positive or a pitfall of sharing the plan. By sharing, you have made the commitment to the team. If you back off without a valid explanation, you risk their disillusionment and the potential loss of some of the team.
An easy way to protect your investment
Building a successful business is not easy. It takes hard work, dedication, sacrifice and a little luck. You buy insurance to protect that business from being destroyed by uncontrollable perils such as fire, lawsuits and liabilities.
But there is another peril that can destroy your company — the lack of direction and planning for its continuing operation. With a little effort and foresight, you can protect your investment with a different kind of insurance — an operational succession plan.
Joel Strom ([email protected]) is president of Joel Strom Associates Inc., Growth Management. His firm works exclusively with closely held businesses and their ownership, helping them set and achieve their growth objectives while maximizing their profitability and value. Contact him at (216) 831-2663.
