Talk about bench strength occupies quite a bit of time in board rooms and kitchens all around the world. I’ve read some articles that talk about the “marriage” between succession planning and successor development; and I’ve read others that talk about how hard it is to find people suited to be the next generation of leaders. Still others present business owners and leaders with something akin to “silver bullet” coaching that can get people ready overnight.
Bench development looks different in publicly traded companies than it does in privately or closely held businesses. In the publicly held businesses, top leadership usually changes every 7 – 10 years. In privately or closely held businesses, especially family-owned operations, top leadership changes far less frequently.
Since we work almost exclusively with privately owned and closely held businesses, that’s our primary concern. The process of bench building is really relatively simple, and here are a few considerations for those of you who are concerned about building a deep, talented bench.
Establish a development budget. Plan to invest an amount of not less than 2% of your total payroll costs in successor development. Focus that development in three areas:
Administrative – so that future leaders know how to manage projects, establish procedures, and identify processes that make it easy for employees to be successful and for clients to do business with you.
Technical – so that future leaders can “spot” emerging disruptive innovations from start-ups and existing competitors. They also need to be able to spot opportunities for their own company to become the disruptive innovator.
Interpersonal – so that they know why people make the world go ‘round and how to get them to do it. Each of us has an individual map of reality; but each of us is also a sample of “1”, and that’s a pretty small sample in any economy.
Invest in everyone. Many organizational development people are running around touting their company’s investment in high potential people, who they refer to as the “HiPo’s”. I suppose everyone else is a “LoPo” not worthy of being developed. Several years ago, William James, generally considered the father of modern psychology, said that most of us don’t even use 10% of our potential. Imagine what could happen if everyone gave just 10% more.
Replace “performance reviews” with “performance conversations”. In short, give people feedback. The whole concept of a performance review seems to be more focused on risk management than on performance management. Invest enough time and money in your management team so they know how to coach, lead, manage, and mentor the people you’ve entrusted to them. If some of your managers can’t grasp the concepts involved in people management and leadership, then give them opportunities to do something else that adds value to them and to your organization. If they still don’t get it, give them an opportunity to be successful with someone else.
Recruit aggressively, outside and inside. Become known throughout your business communities as the proverbial “employer of choice”. It takes more than wages and benefits to have the “employer of choice” reputation. Most people have a compelling need to do and be better. If you don’t provide the opportunity for personal and professional growth, you’ll miss out on the pool of people who look for ways to add value to your organization; and you’ll be “stuck” with those who wonder how little they can do and still keep a job.
Stay in touch with the world around you. The younger generations are not your adversaries, and they’re not lazy, and their interests and needs related to growth and opportunity are not inferior to yours or mine. The younger generations are the very people who will sustain your business, either as employees or as clients/customers.
So, who’s next?
Sign up for our monthly e-newsletter to stay informed on how to overcome related succession planning issues.
