“Big Boy” corporations such as manufacturers and franchisers are in recovery mode from the business downturn of the last four or so years. As these organizations reflect back to lessons learned, they have identified that poor distributor succession circumstances was a critical reason they took such a financial beating. Simply, their dealers and franchisees had spent all their time working in their business rather than on their business, which would have better prepared them to be able to weather the storm.
After being in a position of feeling forced to accept unqualified or fewer distributors in the marketplace, “Big Boy” corporations no longer have the mentality that “If that distribution point goes out, we can easily find a qualified replacement.” They are now creating programs to develop and strengthen their current qualified distribution network. Manufacturers and franchisers that have come to this new appreciation for succession have realized that it is not just about death and retirement but is about positioning a business for the continuation of success in light of predictable, probable and possible contingencies. As a result, the executives representing these companies now know and accept that this is an issue they have both control over and a responsibility to address.
I am witnessing large public companies such as Toyota Auto and Daimler Trucks become not only concerned, but proactive on the topic of succession planning – a subject that is frequently interpreted by their distributors as meddling in their private business. Irrespective of their distributors’ skepticism, these “Big Boys” have acknowledged that their distributors’ succession circumstances impact them too much for them to continue to be passive and polite.
Front line leaders such as Martin Osborne and Monte Mehring of Daimler Trucks North America are great examples of leaders who are strong believers in succession planning. Their cutting edge mentality became evident in 2007 when they led the charge for Daimler Trucks North America to begin identifying common succession issues of their dealer body with the goal to provide their dealers with resources to position them for success. After weathering the storm of the last four years, they are now on the forefront of a succession movement within their organization. They have enthusiastically expressed that the continued success of a distribution point is the joint responsibility of the dealer and the manufacturer, that succession planning builds business value, and that it is not a one and done deal but a way of life that has a positive impact on both the manufacturer and dealer.
The succession planning process addresses key areas of a business that build value today and tomorrow and position a business for success no matter what issues may arise, such as transitioning of the business to a family member or key manager, the death or retirement of the owner, or a traumatic downturn in the economy. As a result of fully understanding the process and its benefits, leaders such as Martin and Monte are proactively providing their distributors education and resources to motivate and encourage their dealers to properly plan and prepare. By putting these programs and processes in place, as well as developing programs for proof of planning, manufacturers and franchisers can have confidence in the strength and resilience of their dealer body.
Sign up for our monthly e-newsletter to stay informed on how to overcome related succession planning issues.
