Russell Bell: Succession planning key for changes in business management or ownership

It's important to ensure the next generation of managers (or successors) has the skills necessary to successfully transition to the next level, writes Russell Bell. Photo / 123rf

OPINION

I've said it before, and I will say it again, you can't spell succession without "success".

Succession, in and of itself, is a simple and essential concept for today's businesses and, as you embark on the journey, complexities will arise which must be strategically met and overcome. I am helping businesses right now develop effective and strategic succession plans.

Whatever the catalyst for a change of management and/or ownership, one thing remains true in all circumstances – without a structured plan, the potential for failure is exponentially higher than would have been the case if a succession plan was in place. But of equal importance is the need to ensure the next generation of managers (or successors) has the skills necessary to successfully transition to the next level.

Alternatively, if you are planning to sell your business and realise the return on your long-term investment in it, you need to prepare your business for sale – and this process must start well before you intend for the sale transaction to occur.

There is plenty of upside to getting this transition right, but the downside risks associated with poorly executed succession can crystallise in many ways.

In my experience, the most prevalent of these is the loss of key people either before or after transition. This is because, in many cases, the successors have not had the opportunity to upskill. Those business owners who invest in their people are more likely to get the succession right (regardless if they sell the business to an internal candidate or not).

Hence the need for training in the necessary skills and competencies so that the next generation of managers and owners can be put in the best position to succeed. Your current management team either needs to be trained to work under a new owner, or they need to be trained to step up and be the new owner.

This is why I developed training courses (well, it really is more like mentoring) that expose participants to the key competencies necessary to lead their organisation – be it in new management roles or future ownership.

The "Leadership for Succession" course is a tailored immersion in the key aspects necessary in the transition from operational activities to management and beyond. We cover areas such as strategic thinking, team and people management, and negotiation (to name a few). The course is registered with NZTE, and participants/businesses are also eligible for a 50 per cent discount on the cost.

At the heart of good succession planning is a defined strategic vision for the future, together with identifying and retaining the key people who will carry that vision forward. Once key people are identified, their needs should be defined, and training targeted accordingly. As a result, the training is tailored.

Mentoring of the next generation is of primary importance, and I have been providing this service locally and nationally for some time, with my clients reporting marked improvements in the performance of their successors and their businesses.

If you are looking at selling your business or handing over the reins to the next generation of leaders, a full and frank assessment must be made of the current skill sets on hand and the gaps that need to be filled to ensure the achievement of succession objectives.

Properly executed succession is not only important for local businesses but also essential for the business community as a whole.