Once there are available successor candidates, business owners should take a less instinctive approach to selecting a successor from the candidates by evaluating some key traits. We refer to these traits as the 5 Cs: Character, Confidence, Capability, Competence, and Community.
First and foremost is Character. A viable successor candidate should have a strong work ethic and an attitude of earning his way. They should have respect for the people that work for you and value them as great contributors to the business, not as pawns in your play. They should be an upstanding individual with integrity and a commitment to doing the right thing.
Secondly is Confidence. Potential successors need to display a Confidence in their own ability to be your successor and in their people. More importantly, they should display a high degree of confidence in their relationship with you. As a part of the succession process, it’s important for both of you to recognize that you will become partners and solid relationships built on trust and confidence are imperative.
Next is Capability and Competence. Some people ask what’s the difference between Capability and Competence.
Capability is the raw talent to do the job. They should have natural people skills and leadership qualities, though undeveloped and inexperienced. This is most evident in evaluating a potential successors track record in leading themselves effectively. Ask the successor candidate these questions:
- Are they self-starters?
- Do they follow through and get the job done?
- Do they accept no excuses?
- How have they done with building relationships?
- Are they a leader or follower in their peer group or among siblings?
Competence, on the other hand, is a proven track record of demonstrated ability with the business itself. We see many potential successors who are full of talent, but have never been afforded the opportunity to really learn the business by firsthand experience. They’ve taken the elevator to the executive suite. Consequently, they lack confidence and the “would be” followers lack confidence in their ability to lead the company.
Finally is community. The successor needs to develop a stewardship mentality that the business is not just about what it can do for them, but what it means to the employees, employee families, customers, vendors, distributors, manufacturers, lenders, and the community who all have a vested interest in the continuity of the business. The essence of community means that the culture represented by the business is understood and respected. Potential successors must be community minded team players who really have the best interest of all parties who are dependent on the ongoing continuity of the business at heart.
Beyond the 5 Cs, it’s important to identify a successor in the context of the strategic plan of the company. If you don’t know where you’re going, then how can you select a successor. On the other hand, if your vision is crystal clear then selecting a successor involves evaluating them based upon their ability to lead the company toward the fulfillment of the vision.
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