As a business owner or professional, you're in charge, you're the boss. When you interview prospective employees, two of the things you're undoubtedly looking for is loyalty to the company and commitment to the job. Turnover is costly, and the last thing you want is to put time and effort into developing someone to become proficient in their position only to have them leave a few months or years later.
I've always said that the ability to look at things from both sides of an issue is what makes a good leader. That being said, lets take a look at both sides of this important question. What would happen to your business and the lives of your employees and your customers if you died in a traffic accident on your way home from work today? Could the company survive your death? Would your employees still have a job and a paycheck to support their households? Lets now look at this issue from an employee's point of view. Just as we don't want to lose an employee, our employees don't want to lose their job and have to start all over somewhere else. Employees want to find a company to work for that values them and looks out for them. If they don't feel that they have job security where they are, they may start looking for something that offers more security. This is especially true with key employees. Both employers and employees are typically looking for a common denominator when it comes to security and longevity. This common goal creates a real opportunity for the proactive business owner/professional.
We're clearly talking about the need for business continuity & succession planning. The smaller the company or professional practice is, the more vulnerable the company is to the loss of a key employee or owner. Most business owners that I talk with on this topic have a complete misunderstanding of the real issues at stake and the opportunities and benefits that can come from business succession and transition planning.
I'm frequently told by business owners "I have that all taken care of." Really, I say, that's great to hear, can you tell me about that. "Sure, I have a big life insurance policy, so if I die my family will be well taken care of." What about your stakeholders beyond just your immediate family? "What stakeholders?" Your employees to start with. "What about them." Well, will the company survive your death? Will your employees still have a job, and if so, for how long? Once you're gone, will the employees stick around to see if the company can make it, or will they begin to look for new jobs right away? What do you think the chances of survival are for the company if the employees start leaving? I'm not saying that the life insurance policy isn't important for your family, but lets not get confused into thinking your succession plan is "all set." What if you get critically hurt or sick? What if it's your spouse or child who is critically hurt or sick? What role do you want your business to play in your retirement? Do you know what your business is worth?
To truly develop a solid succession and transition plan involves layers of underlying planning. It involves identifying and developing key people within the company. It involves business owners learning how to create leverage by strategically growing the business and delegating important tasks and responsibility. It's about building a successful company and creating an exit strategy.
Who are the real stakeholders in your business? You and your family, your partner(s) and their families, your employees, your customers, your suppliers and service providers, and your business entity itself. Focus on taking good care of your stakeholders by really digging in and working on the continued growth and success of your business, don't get caught up like so many business owners do, by just working in their business.
This is a topic with layers of issues to be covered. Follow me as I continue the discussion in upcoming posts.
