Neglecting succession planning jeopardizes the future of your company’s internal transition.
Imagine being in your 70s with no succession plan in place – a thought that can evoke fear and sadness. The importance of management succession cannot be overstated, and yet, it’s alarming how many owners wait until the eleventh hour to address it. Neglecting succession planning jeopardizes the future of your company’s internal transition, making it imperative for principals to take proactive steps. But what are the risks of procrastination? Let’s delve into some key considerations:
- Take action now. If you haven’t already, start your succession planning journey today. It’s a simple yet daunting task. If you cherish your company, the time to begin is now. I understand the daily demands on principals, but I assure you, the earlier you start, the fewer regrets you’ll have. Begin by identifying, developing, and retaining talent. Who within your firm possesses the potential and character to lead your organization? How will you nurture these leaders? What strategies will you employ to ensure their retention? Answering these questions will guide you in cultivating a pool of capable and willing leaders.
- Create ownership demand. Why should anyone invest in your firm? Have you clearly outlined the economic benefits and privileges of ownership? Convey to emerging leaders that becoming an owner is not just an option; it’s a necessity. Show your leaders that ownership means participating in a thriving internal stock market with increasing share value and fair dividends. You must get your high-performing individuals to become owners. For every bonus you pay high-performing non-owners, leakage occurs. Encourage your people to not only receive good bonuses but also invest them in your firm’s stock because there is tangible value in it. Sharing the financial and performance metrics of the firm attracts people. Firm owners must get on a trajectory of growth because everyone benefits in the end.
- Define ownership. Being an owner isn’t merely about being a good project manager; it’s about leadership. Just as you didn’t become a competent AEC professional overnight, leadership skills require time, training, and practice to develop. When choosing a successor, look for a cultural champion, an exemplary role model, and a source of inspiration for your firm. Character is a crucial factor that can make all the difference. If you select owners who are not respected by your employees, there will be a loss of morale. Consider the type of ownership culture you wish to cultivate and work toward it consistently.
A well-planned succession strategy isn’t just a matter of future-proofing your business; it’s an engrained investment in the legacy you leave behind. Don’t wait until it’s too late – act now! Ownership transition is a necessary step in the life cycle of your firm. Let us help you evaluate the many options available. Click here to learn about Zweig Group’s ownership transition services.
Ezequiel Tovar is an analyst within Zweig Group’s ownership transition team. Contact him at etovar@zweiggroup.com.
