When it comes to the planning for the transition of a business, good things do not come to those who wait. Those who do often find themselves feeling the pressure of a ticking clock, caught between needing to move quickly and immobilization.
As the first cohort of the baby boomer generation edges toward retirement age, more and more owners of small- and mid-sized businesses are trying to figure out how to phase back. Many want their businesses to continue, but without the full-time commitment to day-to-day operations they have been used to giving.
Good agents understand that long-term success means more than selling insurance for immediate needs; it means keeping an eye on that clock for clients’ businesses as well as their own agencies. They begin to think of insurance in a different light: insurance for the business’ legacy.
If you are thinking about, and planning for, the next phase of your – or your client’s – firm, taking the following steps will help you move quickly toward the goal, and assure smoother sailing in the process.
1. Know your ABCs
Business owners whole-heartedly agree that their companies started to significantly move forward once they learned to let go of the “C” players and develop effective performance management and coaching processes. It may be difficult to do at first – and it will mean development of conflict resolution skills – but it will pay off.
2. Pay attention to the alpha dog
Businesses also may need to say goodbye to “A” players, where “A” stands for “alpha.” Alpha employees interact well with clients, are high producers, and work hard, but exhibit abusive behavior within the firm, can be bullies, and often serve as stumbling blocks to succession success.
What to do? Identify these individuals, give them a chance to change, and then help them to separate with ease if it doesn’t work out. The people a business owner wants to become buyers of his or her firm will not be interested if it means inheriting alphas.
3. Understand that the proof is in the…projects
Business owners must grant project ownership only when a person has proved his or her leadership abilities. The proof is in strategic learning project assignments for up-and-coming next-generation leaders. These projects will give them the opportunities to prove that they can move from project managers to company leaders.
4. Become a decision-maker
A business’ next generation of leaders will need a methodology for making decisions, practice in making difficult decisions together, and a model to follow. It is important to set a good example for decision-making, so owners who are not decisive persons will be wise to obtain coaching in that area. If not, they can expect stagnation, delays, and discouraged personnel.
5. Be a talent scout
Business owners often can not identify the right talent mix for their firm’s next leadership team. How is the world changing? What kind of leaders will the firm need? To succeed in the future, the next team may require different skills, sensitivities, and attributes than the owner needed. Focusing on the vision of the company, business owners must think carefully about what they really need from their leaders today as well as three-five years from now. Professional assessment tools can go a long way to help identify the best talent.
6. Consider a sale
If business owners are not ready to let go and share authority, or if they have tried several times and failed (perhaps losing key employees in the process), they may be better off being honest with themselves about a legacy. Selling a business to a third party may be a viable option.
7. Take your time
Once identified, the future president of the company must be a leader – someone people will follow. This person needs time to demonstrate his or her abilities, judgment, leadership style, and interactions with people. Business owners who are humble enough and vulnerable enough to listen and change, and recognize that they will need to hone change skills during this process, will be most successful in the succession process.
8. Avoid parity of power
While the next-generation team must make decisions and learn together, “equality for all” can spell disaster. Each person should not necessarily have the same amount of stock or the power as the next. The executive team will eventually pare itself down to the two or three people everyone trusts. Ideally, a next-generation president should be appointed by consensus, based on his or her track record of leadership and ability to gain peer confidence.
9. Identify and correct fatal flaws
Smart owners will check their behavior and leadership ability for these three fatal flaws in transition planning:
• The inability to set direction.
• The inability to align critical constituencies.
• The inability to adapt to changing circumstances.
The ability to grow beyond one’s flaws is an important part of leadership – one that needs to be part of the current owner’s work as well as the next-generation leadership team’s.
As the first cohort of baby boomers edges toward retirement age, the industry likely will see a huge supply of businesses changing hands and coming on the market for sale over the next 10 years. Those agents who have the foresight to look ahead and serve as true leaders for their clients and their own businesses will be those who succeed.
Managing a company, identifying leadership needs, and handling development of new leaders is a challenging task with risks and rewards to match. Paying heed to the steps identified here, and utilizing tools and advisors as needed, will set the tone for a smooth and effective transition in leadership.
9 Steps to Succession Success - To learn more about this author, visit Sandy Blaha's Website.
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Leanne Hoagland Smith
Are your sales where you want them to be? Will you be one of the few who achieves sales success or one of the many who have failed to change? So what are you doing to change those results? Let’s be honest, with companies moving globally and at lightening speeds, the traditional business solutions are outdated and dead. My approach moves your business out of its comfort zone and secures your competitive advantage now. If you are seeking to increase sales, build customer loyalty, create a culture of great attitudes or just achieve some sleep filled nights, then we should talk because my clients have experienced exactly those types of results. Learn more about customer loyalty at http://www.processspecialist.com/customer-loyalty.htm Give me a call at 219.759.5601 for a free strategy session. P.S. If you are seeking a motivational speaker, sales trainer or small business expert that will leave your audience smiling and remembering, please feel free to contact me at 219.759.5601. - Visit Leanne Hoagland Smith's Website |
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