Just as there are many roads that lead to Rome, there are many paths that can be taken when it comes to preparing your successor. Many Dealers believe operational experience in the front and back ends of the business and participating in learning opportunities such as Dealer Academy are all that is necessary to become a successful auto dealer. Operational rotations and successfully completing industry education are extremely valuable steps in the successor preparation process. However, this approach often results in a false sense of security for both the Dealer and the aspiring successor as other critical developmental opportunities are omitted. So, what else can you do to ensure your successor is adequately prepared to lead your business in the future? Here are some tips to help ensure your successor is equipped to take the leadership baton and successfully run with it.
Begin by positioning your successor for success. While it may be tempting to have your child come to work for you immediately after completing college, it may not be in your child’s best interest. Or yours. Requiring work experience outside of the family business can teach valuable life lessons and more importantly provide opportunities for your child to create some wins of their own. This frequently results in increased self-confidence, self-esteem and self-worth. Additionally, external work experience can positively impact your employees’ perceptions of your prospective successor. Employees tend to have more respect for individuals who have worked elsewhere and earned some battle scars of their own rather than coasting into Mom or Dad’s business.
Once a family member enters the family business, make sure he or she understands the difference between simply being an employee and the level of commitment required to become a successor candidate. Place your successor candidate(s) in positions where they can earn respect by contributing in a meaningful, measurable position. Be careful not to promote too quickly as this does nothing but set your aspiring successor up for failure.
Institute a mentorship program. Developing a mentor-mentee relationship can be invaluable to your successor’s career development. Therefore, encourage and help identify a culturally compatible mentor that can serve as a role model and potentially an external resource to help guide and advise your successor. A mentor could be an existing employee or it could be a professional from outside of your business. Mentors willingly share their knowledge, wisdom and experience as well as provide impartial advice on issues your successor may encounter. While the mentor-mentee relationship certainly is not a new concept, it is not utilized as frequently as it could be. Having a mentor fosters personal and professional development and also can provide another element of accountability.
Create specific learning objectives and provide periodic performance evaluations. Everyone deserves and needs performance feedback, especially aspiring successors who may serve as the organizational leader in the future. Ideally, this feedback should occur on a consistent basis throughout the year, not just on an annual basis.
Conduct a 360° Review and Assessment. In addition to on-the-job experience, there are tools available that can assist in preparing your successor. One such tool is a 360° Review and Assessment. A 360° Review and Assessment is a developmental tool designed to help identify leadership gaps and coaching opportunities for prospective successors. The review is designed to obtain honest, anonymous feedback from employees on a prospective or current leader’s capabilities, strengths and weaknesses in a variety of areas (such as decision making, business acumen, approachability, communication, strategic agility, organization, fairness to employees etc.). By gathering a well-rounded perspective from multiple individuals—including peers, superiors and subordinates—who work with the current or prospective leader, the 360° Review and Assessment will reveal how the individual perceives him/herself versus how those participating in the assessment perceive the current or prospective leader. At times there are stark contrasts in how a person perceives themselves versus how others perceive them. Closing the gap in these areas and leveraging an individual’s strengths are the focal points of the 360° Review process. This has proven to be an invaluable leadership development tool.
Transfer critical relationships with manufacturers and strategic partners such as banks. This may seem like a no-brainer, but in many instances Dealers make the assumption that the manufacturer will approve their identified successor or that bankers will unequivocally support their successor candidate. The fact is, transferring these critically important relationships is not automatic and should not be assumed. Instilling confidence with strategic partners that your successor is capable and worthy business partner requires a strategic, deliberate effort over an extended period of time. Find ways to include your prospective successor in meetings with manufacturers, bankers and other strategic partners to solidify these relationships that are critical to achieving succession.
Provide opportunities for your successor to work with other members of your management team. Periodically, there are projects and business opportunities that arise requiring collaboration, analysis or problem solving. Including your successor as a member of a project team can be a valuable learning experience. It can also provide you an opportunity to witness the teamwork and group dynamics of family members and managers who represent the future of your organization.
Unfortunately, there is no shortcut to getting your successor to Rome; however, the steps above can help ensure your path doesn’t hit a dead end. There are a myriad of other items to expose your successor to along the way such as: real estate, contract review, negotiation, insurance, construction, reinsurance, human resources, etc. Successor preparation is a long-term process that requires time, patience, discipline, diligence, humility and accountability on both the Dealer’s part and the successor candidate’s part. Properly preparing and testing your successor in management and leadership situations can provide you confidence in your successor’s ability prior to your exit from the business. Additionally, it should provide employees, lenders and other stakeholders an added sense of confidence your business will be in good hands when you eventually exit. Are you up for the journey?
Sign up for our monthly e-newsletter to stay informed on how to overcome related succession planning issues.