Present planning for future success

By ASHLEY CAMPBELL

Just over a year ago, Don Brodie, managing director of Trio Group, realised he was dissatisfied with his working life. Over 15 years he had built a successful print management company, but now in his mid-50s, he could not see the business moving towards his goals.

Like many business owners, he was too busy with day-to-day management. He had no time to implement his vision of where the business could go, so he sought outside advice from Don Jaine and Stephen Mockett of Auckland executive search company Swann International.

"They spent a half-day with me understanding the business," says Brodie.

"They took away copies of my business plan to study. They then identified what people skills we needed to achieve the plan."

More than that, they found key people with the skills that were lacking inside the company. What they had done was help Brodie identify and implement his company's succession plan.

It included the hire of John-G Snaith, now Trio's general manager.

Succession planning has changed. It no longer involves hiring and training graduates as they slowly work their way to becoming managing director or chief executive in 25 years.

Nor does it focus on training someone into exactly the same skill set as your systems manager or sales director so they can do exactly the same job in five years.

Rather, say Mockett and Jaine, succession planning focuses on the company, its plans and strategy and the skills needed to make it happen. No matter what the size or structure of your business, you can guarantee those skills will change.

Or, as Sheffield partner Mike Stenhouse puts it, "succession planning is all around building the talent and capability for the organisation of the future".

"Historically, New Zealanders have based our replacement policy around 'if that one star falls over, what are we going to do to replace him?'.

"We are actually saying that you need to take a much wider perspective than that."

Attracting the right talent is an increasing challenge for business, making succession planning crucial. Ninety-two per cent of 140 New Zealand companies Sheffield surveyed said their companies would need increased skills and knowledge to succeed in the future, but 38 per cent felt that those capabilities did not exist among their current employees. Forty-five per cent reported a lack of internal candidates with the skills and experience to replace departing employees.

If your role is to create shareholder value, or a saleable asset when you want to retire, you need to get those skills into your company and keep them there.

Where to start? The company's strategic objectives are a good place. In large organisations, these will have been decided for you.

If you own a small to medium-sized enterprise, working them out and documenting them should be the first priority.

What capabilities do you need to meet them? Do you already have those capabilities, perhaps under-used within the company? If so, how are you going to use them? If not, where will you get them?

And, given that other businesses that are planning their succession will try to entice your staff, how are you going to keep them?

Training and staff development are crucial, says Stenhouse.

"We would argue that most employees have considerably more talent and potential than most employers realise and develop.

"When you look at the factors that motivate people in a work environment, that encourage people to stay ... organisations that put an emphasis on staff development make genuine progress.

"Good succession planning has been shown to improve staff retention."

That means looking for staff development opportunities, rather than simply doing what you have always done.

When your receptionist resigns, what do you do?

Many businesses hire another receptionist as fast as possible to fill the gap.

But your company may need a different skill set. When your accounts clerk finishes her accounting qualifications next year she will want to relinquish some tasks to concentrate on analytical work.

How are you going to make that possible? A receptionist keen to learn payroll and then move into accounts will give you a better skill match for your future needs.

It's an approach Brodie has taken for years. "Any time somebody leaves, we almost start with a blank piece of paper and say, 'Do we need that role and do we need it in the same way?'."

Once you have the skilled staff on board, ensuring they see a good fit between the company's strategic objectives and their own plans is essential.

One of the major weaknesses in small to medium enterprises in New Zealand is that not enough thought is given to career planning, says business adviser John Corban of Inspired Business Solutions.

Let's say you have hired Mary, a receptionist keen to move into accounts.

As the manager, says Corban, it is important to "sit down and talk to Mary about her long-term objectives and what she wants to achieve.

"How can her role be developed so that both her objectives and the company's objectives are met."

But it's not enough to do that once. Revisit the question regularly to ensure the company and Mary's aspirations are continuing to develop in the same direction.

Creating "golden handcuffs" for key staff in the form of equity may be necessary to keep the planning on track, says Corban. If you want people to buy in, you've got to share the financial reward around.

Since Brodie implemented the plan he developed with Swann, the business has grown and expanded into Australia.

"We've had quite a lot of growth, and with it we can provide a lot of opportunities for people to develop their leadership skills and their careers."

Now he is considering inviting one or two key staff to buy into the business.

"I'm happy to give up some shareholding, because I may have a smaller share of the company, but the organisation will be much larger. I'll be able to attract better people and provide better service to clients."

And the business will continue and grow, which is what succession planning is all about.