Critical Steps for Transitioning Key Managers With Ownership Potential

A major problem confronting many privately held businesses is the lack of critical key managers. It is not that a quality management team is completely lacking, it is that they are all the same age as the owner. Typically these people intend to retire at the same time as the owner. This presents difficult transition issues. The key is to bring in an appropriate number of younger key managers and grow them to succeed the current key managers. If you bring on younger managers with "ownership" mentality you will also provide yourself with an additional exit strategy. Below are steps to do this:

• Determine if you are going to need to reduce current staffing in order to bring on new people or whether growth will support the additional payroll
• Critical positions (CFO, President, Vice Presidents) requiring succession candidates who must stay through a transition are identified and the list updated periodically
• High potential individuals are recruited from within or from the community. Remember when recruiting from the community, no matter how hard you screen many will not work out. This takes time.
• You or another senior manager must mentor each prospective Key Manager to assist with their development
• Ownership interest, financial ability, and "owner mentality" are reviewed and monitored for prospective owner/successors.
• Candidates are removed (and depending on the size of the firm, position held, salary etc. let go) when they repeated fail to progress on their development plans, or they lack integrity, or continually experience poor performance where they have control
• Candidates are given a variety of assignments and job experiences to help them develop the skills necessary for a leadership/ownership role.
• These may include: Internships, Special projects, Educational opportunities, Peer groups, Coaching, Experiential learning
• The succession planning process is regularly monitored (with a timeline) and updated. Key managers who can buy you out and stay in the event of a market sale are an essential element to ANY business succession strategy.

Make sure you are working on this today. Click or Call Greg Caruso at 410-507-5441 to discuss you situation confidentially.