Successioning Your Business:
Five Simple Steps that Arenít Exactly Easy
As we all struggle toward better economic times, who knows what the future of graphic communications will be? Eventually the printing industry will probably assume a new and unknown face very different from the business model we followed before. But like all past recessions, the current economic slump has already altered the way we do business. Already it requires every company to define itself differently and to discover ways of successioning its operations to survive the storm and emerge even stronger.
The goal of this article is to help companies cope with these current pressures. It outlines how to succession your business and reorganize your staff to create a more profitable future. Our purpose in following a simplified, five-step format is to demonstrate that, rather than being complicated, the process of successioning is actually fairly simple and straightforward. Rather, itís the thought that you have to put into it and the practical measures it requires you to take afterwards that are the hard parts!
Definition of Successioning
Successioning has many definitions; but since we are the leading source of human capital for North Americaís printing industry, our favorite is:
a process designed to ensure the continued effective performance of an organization by making provision for the development and replacement of key people over time. Succession planning is generally considered to be a strategy of workforce planning.More accurately--although we confess to a bias in favor of people--we view successioning as the sum total of all aspects of a businessís strategic plan. It provides the interface between an organizationís strategic direction and the human capital needed to achieve it. The process of successioning is an invaluable exercise for anticipating the future needs of your organization. It can also evolve into a dynamic infrastructure to help you find, assess, develop, and monitor the human capital your strategy requires. PrintLink can support you immensely in this process with our practical expertise at sourcing job candidates, our broad experience with the printing industry, and the depth of our critical thought.
The Five Steps of Successioning
Step One - Reflect seriously first
- The current depressed economy necessitates serious reflectionóboth business and personal. Without question, many current economic events are neither of your making nor under your control. But regardless, as a business owner or manager, you still retain responsibility for the key decisions and direction of your business. You are obligated to devise and execute a succession plan that will enable it to succeed as far as possible.
- You are equally responsible for yourself, and therefore must identify what role, if any, you personally want to play in the new economy. Formulating strong decisions to move ahead in recessionary times is not a task for the faint of heart. Rather, itís an uphill battle best left to motivated, energetic individuals who can commit to the remodelled future of print.
- Thus at this juncture, as shipís captain, you can and should take your pick from among the wide range of options available both to you and your company: whether to change course, return to harbor, refit to fight another day, hire new officers or a new crew with new ideas, or just sell the boat to another owner and go ashore for good. The decision to exit the business is just as reputable a choice as the decision to go full steam ahead.
- If you do decide to exit, do you want to sell the business outright or succession it gradually to the new management of your choice? If you elect to sell outright, what things should you do first to make the business more saleable and make the sale run smoothly? After selling, how will you earn a living? Will a noncompete agreement with the new buyer sideline your future plans? What post-sale relationship do you personally want to maintain with the business and for how long?
- Whatever your decisions, itís imperative that you donít take too long to consider them before putting them into practice. The reason is that in the tough economy, while some circumstances may allow you to wait them out, most will probably require you to take prompt, decisive action to avoid compounding a bad situation with a too-slow reaction time. Steering the business away from an iceberg and in a new direction may require a long execution cycle; and if you wait too long to begin--just as befell the Titanic--your ship can quickly sink before youíve managed to change its course.
Step Two - Analyze what your company does best
- Identify your companyís best revenue streams from the past.
- Make a short list by pruning these products and services down to the ones that still remain viable and will continue to be so in the future.
- Analyze and streamline the infrastructure and workflow that support your future offerings to your customers.
- Using a spreadsheet, develop a simple matrix to define the skill sets and head count your workflow requires.
- Add to your future products and services by communicating regularly with your existing clients about their changing circumstances.
- Identify additional outsourced services you could be offering them to offset their internal changes and downsizings.
- Before actually offering these services, be sure they fit into your overall succession plan (since ideally they could represent a continuous source of future revenue for your business.)
- If they fit, then calculate the additional skills or personnel you will require to execute them on the matrix developed in Step Two.
- The objective of this important part of the exercise is to have the right person in place for every job now and into the future. You canít achieve this result while operating in a vacuum. In fact, we cannot emphasize enough the importance of talking and dealing openly and honestly with your team. If your people recognize that you are acting truthfully and responsibly, even if you are delivering bad news, they are far more likely to remain productive and regard you respectfully in future. We also recommend that you include your key staff in your deliberations on successioning and--above all--communicate your succession plans openly both internally and externally.
- Internally for starters we suggest an initial group meeting to advise your team that you are embarking on a human-capital inventory and assessment. Then talk to each staff member about it individually.
- With the resulting data create a simple matrix that includes each and every member of your team. Identify the relative age of each individual. Assess individuals on the basis of their skill set, performance, corporate values, and perceived potential. Particularly in todayís critical environment, one essential competency to consider is their "learning agility"--the ability and willingness to learn new things and adapt to new situations. Also tabulate the life span of each personís current job function and future career path with your company.
- Compare the matrix youíve just compiled with the one developed in Steps Two and Three above.
- Devise a plan to fill the gaps that emerge between them, replace retirees and others who are likely to move on, and eliminate dead wood--either by training, promoting, hiring, or termination. With this plan try to achieve an age-blended workforce combining the experience and polish of senior workers with a stable and promotable middle-aged cohort, and the youthful perspective and affinity for technology of younger staff. Use profile testing on key personnel, both to confirm your decisions about their future potential and as a hiring aid going forward.
- Break down the above plan into specific actions and schedule a timetable for each one.
- Donít forget to monitor all the decisions and actions youíve taken to evaluate their success. Keep adjusting your plan as much and as often as needed.
- If your business is so static that it offers no potential for staff to advance or tackle new challenges, then hire and retain people who are content with such a situation.
- Conversely, if your business dynamics require people who are flexible, worthy of promotion, and ambitious, then your hiring criteria, job functions, performance evaluations, and reward systems should all validate these requirements.
- Just now the soft job market includes a greater-than-usual number of capable, well qualified candidates who are seeking new employment opportunities through no fault of their own. It is false economy to think that you can take advantage of the high unemployment rate to hire them for peanuts. Some of them, however, would probably be amenable to joining your company for a wage beneath their ambitions if your job offer also includes an enticing future career path for them with your company. To prove your sincerity, your job offer and succession plan should specify your intentions in writing. Otherwise, if you donít give them realistic hope for the future, then they will merely use you as a stepping stone to continue their search for more worthwhile opportunities.