When Should I Be Thinking About Succession Planning or Exit Strategy?

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Dear BAM Mentor,

I keep hearing about succession planning and having an exit strategy… But when should I be thinking about this? How does it tie in with leadership development in my team?

~ Thinking Long-term

Dear Thinking,

None of us will last forever. Every manager and every employee someday will move on, either to another job or another company or to retirement or to death. If Jesus returns shortly then the calculation is different, but it is a pretty good bet that no one will be in the same job 80 years from now.

Some people are pretty comfortable playing things as they come and responding to problems as they arise. Often that works. But it’s really a wiser move to have some plans in place, especially for key positions. If something unexpected happens to a key employee it’s not at all a sure thing that you will be able to find a replacement in a reasonable time. In our work we have seen expatriate managers suddenly blocked from entering the country or suddenly have a spouse announce he won’t live in the country any more. Kids get serious illnesses or require therapy that is not available locally. We have also seen national managers suddenly decide their family will be better off if they relocate to a wealthier or safer country. In most of the cases I can remember the decision was sudden and unexpected and the consequences were very hard for the company, sometimes fatal. 

The challenge of course is that a plan that makes sense today can be meaningless in six months or a year.  Today it looks like Maryem is the perfect backup for the finance manager, but you don’t know that three months from now Maryem will accept a job with a competitor and not be available for you. Or you can be grooming Franz to take over as manager and find when the time arises that he feels called to other ministries and is leaving the business instead. That’s a problem with our plans – God tends not to pay too much attention to them!

But this doesn’t mean contingency planning is a worthless exercise. Sometimes Maryem will be available and sometimes Franz is just waiting for the chance to take the new job. Beyond that, the exercise of planning and thinking through what it will mean to make a transition from one person to another can help the organization understand the skills and gifting required for various positions. And that is invaluable.

There’s an old fashioned belief that jobs are carefully designed with identified skills required to fill the job. When the job becomes open you look for people with those skills and voila, the job is filled. The reality is that people bring their unique talents and experiences to a job and then re-form the job around who they are. Rarely will two successive managers run things the same way. This means you need to think about potential replacements more broadly than most people do. Character and core gifting is more important than many of the specific skills the incumbent may demonstrate. Sharp people learn quickly on the job and the staff has learned skills they can share with a new boss.

Often the best replacements come from inside. One of the gifts a company can give to the community is internally developed business talent. If you are an expat BAMer then developing a local replacement for yourself is a great gift to the local church and community. And if you train and prepare a replacement candidate but you don’t move out then that trainee may take a job elsewhere. That’s not bad. You have then planted a kingdom-minded, capable manager in another company who will be a blessing there and perhaps multiply your ministry. Generating good talent is one of the many great contributions a BAM company can make to a local economy. It may not be the best thing for your financial bottom line, but there are other bottom lines to consider!

So to answer your question about when to be thinking about this I would say all the time!  Jobs change and people move and you need regularly to be thinking about changes in product or service design and developments in technology. This means you need to be thinking about both the spiritual and interpersonal dynamics of your staff on an ongoing basis. You need to be thinking about getting good people in and developing them so that they can do great things in your company or elsewhere. Both are wins for the kingdom and both are products of a healthy BAM company.

Exit strategy is a slightly different matter, but many of the principles are the same. No founder should be running a company for 65 years. We all move on. But moving on can be fatal to the firm if there’s no one in line to take your place. Exiting by selling your firm is a fine thing to do as long as there’s a buyer. But the value of most small businesses is just about zero without the existing manager because most managers haven’t prepared for the firm to continue without them. That’s part of an exit strategy – making sure your business can be passed along to an employee, a child of yours or sold as a profitable operation to someone else. None of these happen by accident. It’s a major challenge for small, family run businesses everywhere and the challenges are multiplied in cross-cultural BAM businesses. So start praying about your future and where your business should go then start preparing people.

by Robert Andrews

 

Read another Response on this topic:

From Colleene Isaacs:

Every life experience has a beginning and an end. The multiple stages of parenting is a fairly accurate depiction of this truism. First-time parents know, even in those first days of newborn-nuzzling, they must one day release that child. The busyness of the initial parenting season blurs the reality of inevitable separation. When the eventual becomes the reality, the detachment process can be palpable. As painful as this process can be, if it doesn’t happen, the child will most likely never continue to develop into a fully productive, self-sufficient individual.

Similarly, one can view the life-cycle of a business and its founder in the same manner. For founders, the early stages require us to do just about everything. We build and test product, we market and sell, we provide customer service, we make coffee, we clean toilets, and we take on any and every unenviable task, if seen as advancing our vision. Our “new baby” is solely dependent on us. For some in this stage, we can’t even leave the “baby” for fear we will return to a mess at best, or a dangerous situation at worst. [Read More…]

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