I have had the good fortune recently to work with a local medium-sized business on some interesting growth challenges. Like several others I’ve worked with, the focus of “running the business” was drawing away from the creativity and enjoyment of why the owners went into the business in the first place. Worrying about staff, inventory, capital investments, clients, marketing, cash flow, paperwork and all the other necessities of business today burns up a tremendous amount of time; time that would be better spent following the latest developments in the industry, developing products, processes and people, and getting back to doing what they love.
Have you ever noticed how quickly time goes by when you have something else you’d like to be doing, but have other more pressing needs to get through first? These folks live it every day, and as a result, rarely have the time to do what they do best, let alone step back from the paper tiger to take a longer-term strategic look at where they want to take the business. Having met with the owners a few times I noticed common themes about how much they didn’t enjoy some facet of running the business. After asking a few questions to see how far they had thought it through, it became clear that either they didn’t see any alternative or did, but weren’t too keen on it. So, here’s what we did…
First, the buzzword: “succession planning”. The easiest way to put it in the proper context was to think in terms of replacing the owner. If the business had to replace you, what does the replacement need to be able to do? It may help to put it in a more real context:
- Could the business continue without you?
- If not, what do you think the business would be worth in the event of your departure?
- Are you OK with that?
Often the value of a business is tied up in the skills of a key individual. I’ve seen it in almost every small and medium business; the founder or star employee is the centre of the universe for that company; yet if that person leaves, there really is no business. The first order of business, especially if you want to retire some day, is to PUT YOURSELF OUT OF A JOB. The business (and likely you personally) will be worth MORE if the business can stand alone without you than if it can’t.
The first step to solving these interrelated challenges was to ask what an average day looked like. They key was to think about functions being performed and the amount of time spent on each, with the objective of laying out what skills are being exercised. How many hours were worked in a day, spent on a task, etc? Was there a weekly, monthly or seasonal cycle? What type of ad-hoc things popped up, how long did they take, and how frequently?
Armed with this information, list the functions/tasks by the amount of time consumed (daily, weekly, monthly trends). Just getting this on paper is probably the biggest part of the review; the discussion it creates is invaluable. Now a few more questions. As the founder of the company…
- What tasks on this list are things you are NOT willing to give up?
- What tasks on this list would you be comfortable to be informed of or be consulted on rather than do yourself?
- Which ones would you be happy to never deal with again?
Now you have the beginnings of your succession plan. Armed with this knowledge, is there someone in the organization these tasks could be assigned to? Could someone be hired, even part-time, to take on some of these tasks?
The hurdle here, and it is common to many businesses, is that it’s EXTREMELY unlikely that you’ll be able to replace them with one person, and even if it is possible, there may be a certain amount of ego involved with that perspective. They key is to tie in the “letting go” of lower value-add tasks to the better end-state value of the business.
The decision on how to proceed with the information is up to the owner; my role was to help them see the possibilities, provide a pragmatic way of approaching the situation, and offer options to bring them back to the place where they’re happy to come to work and have a plan for long-term company value.