As we all know, small businesses face a number of challenges not experienced by larger firms. One of the most pressing challenges is that of succession planning, especially when no internal candidate is readily available. Unfortunately, what I sometimes see is a business owner staying at the helm of their business until their health begins to suffer. When that happens, the health of business also begins to suffer, often resulting in a good, viable business being destroyed by lack of planning.
Why do small business owners avoid the topic of succession planning? Many continue to love their job and will tell you that they don’t ever fully expect to retire. Still others are simply reluctant to think about handing over the reins and/or find it difficult to make hard choices. Finally, others just don’t realize how time flies and that it is better to make decisions while of sound mind and body.
However, once a business owner decides it is time to monetize their investment and move on to retirement, they don’t know where to begin. In fact, they get into somewhat of a panic and think they have to put their business up for sale and/or simply close the doors similar to two recent closures of family owned businesses in Winnipeg.
That’s where hiring a seasoned, external candidate can provide a number of positives to your company. This is particularly helpful when the external market has changed. For instance, a company with good potential but is labelled as a “sleepy”, slow-moving organization might find itself in a new competitive market and now needs a leader who is able to operate in this fast-paced environment.
An external candidate allows the business owner to spend time working closely with the new leader teaching them all the nuances of the business while at the same time reaping benefits from the new ideas the individual brings to the table. The long term goal of this approach then is to recruit a candidate who would have an interest in purchasing the business over the long term.
When the decision is made to recruit an external candidate, the business owner must shift his/her mind into a marketing mode. In other words, you need to promote the value of the business and your reputation so that you can attract viable candidates. This mindset also allows you to target potential candidates who may not be looking for another job opportunity at that moment.
Working with an executive search professional, there are a number of steps to be taken in order to recruit an external candidate who might be a potential business successor. First, you will need to work with me to develop not only a deep understanding of your company but also to understand and confirm the role the new incumbent will play. Changing roles within the company and bringing a new person in to do your job is one of the most difficult tasks for a business owner. You need to “let go” of some of your responsibilities and be able to give authority to the new person.
In order to do that, it is important to identify and confirm the technical skills of the job as well as the personality and behavioural characteristics required to succeed in the job. Once this is complete, I work closely with you to develop an effective search strategy. In most cases, potential candidates are already happy in their job and are not looking for something new. This then requires personal contact with a number of candidates, presenting them with the opportunity and encouraging them to apply.
The next step is to develop a methodology for making the final selection. This typically will require several interviews as a means of getting to know the candidates. The process should not be rushed because it is important that the finalist candidate is truly the right fit for your business.
Once the finalist candidate is selected, you need to devise an orientation process in order to introduce the individual to the organization and to begin the training process. Much of the time needs to be spent helping the new leader get a grip on the strengths and weaknesses of the business. Since the new leader doesn’t have any established relationships, they will have the advantage of objectivity.
Keeping in mind that change takes time, it is my practice to stay in touch with both the business owner and the new leader in order to assist with the succession transition as it moves along.