Once a potential successor has been selected, the company then enters the training phase. Ideally, a program is developed through which the successor can meet goals and gradually increase their level of responsibility. A suggested part of this phase is where the owner or manager may want to take a number of planned absences so that the successor has a chance to actually run the business for limited periods. The training phase also provides the feed and grain company owner or board of directors with an opportunity to evaluate the successor’s decision-making processes, leadership abilities, interpersonal skills and performance under pressure. It is also important for the successor to be introduced to the manager or business owner’s outside network during this time, which should include customers, bankers and business associates.
The final or transition stage in the process occurs when you as manager or owner retire and your successor formally makes the transition to their new leadership role. Bowman-Upton stresses that the business owner can make the transition more smoothly for the company by publicly committing to the succession plan, leaving in a timely manner, and eliminating involvement in the company’s daily activities completely. We understand this is a very “tall order,” as you are being asked to “walk away” from a business in which you have likely invested significant time, effort and thought — it is a part of you! But — this is where the thoughtful and careful execution of a succession plan pays off — it should make this transition both easier and successful. In order to make the transition as painless as possible for yourself, you as the company owner/manager should be sure to have a sound financial plan for retirement and to engage in relationships and activities outside of the business.
We want to re-emphasize a couple of important points. You can kill a succession plan before it has a chance to be successful by failing to prepare your successor and/or by choosing someone based on some criteria other than merit. Employees will rally around the “right” person, the person ready and qualified for the job. They will quickly dismiss the person who has the job before they are ready, or gets it because they are the “oldest son,” “favorite daughter,” etc., when someone else is better qualified. Again, this choice can be very, very tough — especially if there is no family member qualified for the role.
The succession plan can also get undermined if the owner just can’t stay away from the business. Being available for guidance and to provide a steady hand when needed, while not interfering in the day-to-day, is a delicate balance to strike. But, the owner/manager who lets his/her protégé spread their own wings is the one most likely to be able to enjoy retirement — and the success of what they have built.
Succession planning — Part of your strategic plan
Identifying up-and-coming employees and grooming them for management in your business and developing a succession plan should all be a part of your strategic plan. While these items may not require quite as much attention as the short-term plan to develop capacity to merchandise an additional 500,000 bushels of grain in the next two years, or to manufacture and sell an additional 25,000 tons of feed — they are certainly important. Hopefully, this column has spurred your interest in developing such plans and given you some things to consider along the way.