Planning or Development ?
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Plans do not develop anyone – only development experiences develop people.
For example a company may have great plans to shed expenses. Management may be very proud of their plans, which include detailed daily goals for x, y and z. And if our execution were half as good as our planning that organization would quickly would be very lean. But too often the devil is in the execution and focus remains on the planning when in that case it should progressively be on the shedding expenses , not planning for shedding expenses.
This is a juxtaposition, more poignant because anyone who knows me knows my favourite adage – “businesses do not plan to fail – they fail to plan”. Bluntly explained – the devil is in the weighting of the planning and the execution.
That is one reason why I promote that when we consider succession planning we are more accurately contemplating succession development and that we measure outcomes in that regard – not just successes.
In a large organisation this might include goals like the percentage of executive level vacancies that are filled from within by way of an internal promotion versus those that are filled by external recruitment , giving clues to the current effectiveness of the current succession planning within an organization.
Another “Seanism” is “keep it simple stupid”. I often meet companies adding excessively complex assessment criteria to the succession planning process in an effort to improve the quality of the assessment. I have seen criteria that would be difficult for a clinical psychologist or behavioral scientist to assess , much less the average senior manager.
While development plans and succession charts aren’t promises , they are often communicated as such and can lead to frustration if they are neither genuine nor realistic. Stay realistic. The bottom line is simple – don’t jerk around high performing leaders with unrealistic development expectations. Be honest , only give the promise of succession if there is a realistic chance of it happening.
I have been visiting and working Asia since 1981. In China and in Chinese culture family is all important. Statistics indicate that 36.9 per cent of the 762 listed private companies in China’s A – share stock market are family firms.
Succession planning and succession development is important to these businesses and not just to family members ( both individually and collectively) it is important to other stakeholders in the organization, from suppliers to external shareholders
A study by Professor Joseph Fan ( the Professor of the Department of Finance & School of Accountancy, and Co-Director of Institute of Economics and Finance of The Chinese University of Hong Kong ) found that in family controlled publicly listed companies in Hong Kong ,Singapore and Taiwan that in the five year period following a generational change in ownership and control this coincided with a 60 per cent ( average) seasonally adjusted drop in the listed quoted price -an accepted benchmark of enterprise value.
This can be attributed to market perception and sentiment as to the changing of the guard when a legendary builder of business and leader step downs or to a lack of successful passing of management, leadership and other intellectual property – or both.
Insala -a leading global solutions provider of career development mentoring and career transition say “people don’t consider succession planning, -organisations do”.
The consequences of not being prepared will have a major impact on an organization’s ability to achieve goals and strategic and financial targets if it is not part of the company’s strategic planning process. The organisation will fail to adequately deal with projecting future changes and determining how to meet those challenges . This is applicable whether the organization is family controlled or not .
Organisations need to start the planning process at least one year out but generally no less than three years out, and in family offices this lead time can be even longer. It all depends on a plethora of individual characteristics and circumstances – the size of the business , what type of data is being tracked for each manager in terms of core competencies , key strengths , those matrixed across the organization , and performance evaluation results such as key performance indicators and benchmarks and targets and so on.
Even organisations who have this expertise typically outsource the advice from people that focus on succession planning and development planning process design and consulting.
The Merkin Group has been the corporate face of The Rothsey Family Office since 1981 and now offer advisory and consultancy services in global business and asset management strategies including corporate governance, risk and compliance as well as facilitating outcomes through valued added solutions, introductions or capital.
We have successes in organisations from 1 to over 1,000 employees and have a long history of both successful family office management and global private and public company experience.
In Asia The Merkin Group work with Business Succession Partners Ltd , a Hong Kong firm facilitating outcomes for business owners and business professionals particularly in the Family Office space.
In conjunction with The Merkin Group BSP can partner with business owners putting in place a succession plan including cost effective access to senior management professionals, independent board level advice and the training and management of future employees. There are no fixed costs or upfront fees ensuring that interests are 100% aligned with that of the organization. Core competencies include recruitment of senior management, succession development and planning, Independent advice and consultancy services, training and development.