Training Successors for the Future
Many CEOs assume that because they built their businesses up themselves and know how to run them that their children will too. This is incorrect. We have seen enormous changes in technology and business in the past decades. Investing in proper training for your successors, whether that’s hands-on training or university classes in business management, will pay off over time. It’s also wise to have them work in different departments or positions in your business, getting to know your employees, management, and all of the aspects of the business up close.
When they have some training under their belt, give them actual responsibilities in your company so they can demonstrate what they have learned, gain confidence, and make decisions. If they do show that they can handle responsibility, give them more. Decide ahead of time which milestones will indicate they have enough aptitude and experience to lead the company in your stead. It will help employees and managers to accept your child in a leadership role when they’ve proven they can handle it. Building mutual trust and respect between the current staff and company leadership is crucial for your successor to thrive in this role.
Training Successors for All Key Roles
Business owners should use these same training and advancing techniques described above to fill positions throughout the company. When done correctly, succession planning incorporates recruitment and advancement for all employees. It works to fill key roles within the company with capable and talented people. This offers a number of benefits for the company as well as the owner.
First, succession planning takes some of the guesswork out of the future. When a company has a consistent, targeted recruitment and training process, it can fill not only current positions, but prepare for future vacancies by training employees for future roles. This means that the company will have a strong workforce to rely upon and will experience less disruption during vulnerable periods such as recessions or leadership transitions.
Employees appreciate it when company leadership invests in them and mentors them for advancement. They are more likely to develop loyalty to the company and remain in a workplace if they believe they are valued and there is room for growth. Forward thinking companies also tend to attract better candidates for positions. This creates a virtuous cycle within the organization as it attracts, advances, and places motivated, responsive people in leadership and fully trained employees in positions that reward their efforts and abilities.
Finally, focusing on succession planning will strengthen the company as a whole. For the owner this will mean financial rewards as the company grows and becomes more profitable. When the time comes for the owner to exit, the intellectual capital he cultivated will mean a higher selling price or a larger financial payout if he decides to transition the business to a family member or members.
Do your employees understand their career paths and opportunities within your company? Is your successor developing the skills and knowledge he will need to take over leadership in the business someday? These are the questions all business owners need to answer long before an exit. If you would like assistance with succession planning in your company, call us at Prometis Partners. We are here to help businesses identify areas of vulnerability and address them before they become entrenched weaknesses.