Picking someone to lead your company after you step down is probably among the hardest aspects of retiring (or otherwise moving on). Sure, there are some business owners who have a ready-made successor waiting in the wings at a moment’s notice. However, many have a few viable candidates to consider — others have too few.
When looking for a successor, for best results, keep an open mind. Do not assume you have to pick any one person — look everywhere. Here are three hot spots to consider.
- Your family – if yours is a family-owned business, this is a natural place to first look for a successor. Yet, because of the relationships and emotions involved, finding a successor in the family can be particularly complex. Make sure a son, daughter, or other family member really wants to succeed you. Also, keep in mind that desire is not enough. The loved one must also have the proper qualifications, as well as experience inside and, ideally, outside the company.
- Non-family employees – keep an eye out for company “stars” who are still early in their careers, regardless of their functional or geographic area. Start developing their leadership skills as early as possible and put them to the test regularly. For example, as time goes on, continually create new projects or positions that give them responsibility for increasingly larger and more complex profit centers to see how they will measure up.
- The wide, wide world – if a family member or current employee just is not feasible, you can always look externally. A good way to start is simply by networking with people in your industry, former employees, and professional advisors. You can also try placing an ad in a newspaper or trade publication, or on an Internet job site. Do not forget executive search firms either; they will help screen candidates and conduct interviews.
At the end of the day, any successor — whether family member, employee, or external candidate — must have the right stuff. Please contact our firm for help setting up an effective succession plan.