Long ago I was taught by mentors like Ray Kroc, founder of McDonalds, and Michael Gerber, author of The E-Myth, that building a successful business is like creating a money-making machine. You created a valuable asset when the money-making machine could run without you.
It is not enough to create a business that can attract high-paying clients on a regular basis. (Every day I repeat the affirmation that I am happy and grateful we attract clients in increasing numbers on an ongoing basis.) One aspect to be sure to address is who will run the money-making machine if you were out of the picture.
You are the captain of the ship. Have you named some first mates and second mates to take over if something happens to you in the future?
“Unfortunately, too many leaders don’t address the future of the business,” according to strategic succession planning specialist and author Daniel Feiman. For decades Feiman has served as adjunct faculty at UCLA continuing education and as the managing director of the southern California firm Build It Backwards. He is the author of three business books including The Book on Business From A to Z.
Not addressing the future is shortsighted for your investors, employees and other stakeholders like vendors and suppliers.
To address that future, Feiman says most successful organizations use a succession planning model that incorporates five steps, which can also be called phases.
“Each phase uses specific tools to identify, assess, measure, and accomplish precise objectives, setting up and linking to the next phase,” he said in a phone interview.
While the process can be completed quickly with the right tools and facilitation, implementing the resulting roadmap takes time. According to Feiman, his investment in the future can pay dividends for many years with successful growth and improvement.
Here are his five phases:
The preparation phase. “This phase starts with assembling the right succession planning team who knows the purpose of the initiative, including what the expected outcomes are, and follows a checklist to make sure the process yields the desired long- term results,” says Feiman.
The identification phase. “Identification of the critical roles in the firm is essential to the success of this effort,” says Feiman. “Once identified, ideal candidate profiles for each role are developed to help the team nominate potential future leaders.”
The analysis phase. Feiman says, “Nominated candidates are assessed and compared to the ideal profile created from the identification phase.
The critiquing phase. “A development plan is drafted for each nominated candidate to begin their evolution into a potential leadership role,” says Feiman. “A self-assessment follows to see where the candidates see themselves in the process.”
The implementation phase. “The plan is put into action,” says Feiman. “The process is documented, the progress is measured, and the program is evaluated regularly. Adjustments are made and the initiative continues to successful results.”
Working through the five phases is a great step for protecting the future of the firm and giving a boost to the present.
“Succession planning is a valuable exercise for every firm,” says Feiman. “It is a key piece of the preparation puzzle: Preparing for growth, preparing for change, and preparing for the eventual evolution of the enterprise and of the industry.”