Business owners are often self-made, driven individuals who have created their success through sheer determination, hard work and knowing what they want – and doing what it takes to keep their business moving forward.
When an owner starts their business, they often hire people they already know to fill start-up roles. Then comes the first stage of corporatisation. They hire a salesperson, accountant, administration manager and so on. This, together with new systems and processes, enables growth. Some businesses remain at this level, with the owner continuing to add value and lead in all functional areas of the business.
If growth continues, the second stage of corporatisation occurs. This is when the owner hires a financial controller, sales manager, production manager and other senior roles. As these people begin to apply their expertise, the owner needs to start stepping back and empowering them to do the jobs they were hired to do. Owners that don’t truly step back often cause problems and become a roadblock to the growth and development of their people and the business.
The third stage is generally when the owner, or leader, starts to look at succession and bring someone in to groom for the top job. Of course, this has been the owner’s life potentially for decades and letting go can be the greatest challenge. Owners may keep ‘adding value’ and solving problems – at least in their minds – yet not empowering the new person to take a genuine leadership role. I have seen leaders confronted by this…saying one thing and doing another. Invariably they haven’t come to terms with what ‘stepping back’ really means. This causes distress and frustration for the new leader, and even confusion for staff, and often ends in failure.
There are six keys to stepping back for owners, or long-term leaders, when it comes to succession:
- Know clearly why you want to step back. Get someone to ‘hold the mirror’ up to you so you can understand the process and the changes you will need to make. Who knows, you may decide not to step back?
- Ask whether there is something else you can commit to, that will truly engage you with passion, is separate to your current role and offers a compelling reason to go.
- Discuss it with someone you trust who will give you their honest opinion as to whether they think you are ready for the change.
- Engage someone who can plan the change process with you and ‘call you out’ if you are not making the changes you committed to. When owners and leaders have stepped back effectively, and genuinely allowed a transition to take place, they have generally engaged someone to go with them on the journey.
- Appoint someone to gain feedback from staff and the person being groomed as the new leader to determine whether your behaviour is adding true value.
- Implement an advisory board so the new leader has the benefit of diverse perspectives in their reporting line.
Above all, the key to succession planning is the planning itself. It’s either a reactive process that typically leads to damaging outcomes, or it’s an empowering process that, despite having growing pains, can position a business, and its people, for a strong future.