I spoke recently with a colleague who related a story about a family business. The company thrived for nearly 100 years through three generations. But when the owner and another key employee both passed away suddenly, there simply wasn’t enough depth to sustain the business.
Succession planning is a challenge for many mid-size companies, not just at the ownership level, but at the operational level, too. These companies aren’t large enough to require – or afford – teams to perform discrete functions. More typically, there is one person who executes each distinct role in the organization. And that person oftentimes has knowledge and skills developed over years or decades on the job – experience that just is not readily replaceable.
No owner wants to be forced to wind down because there is no one with the know-how to carry on. So, how can a mid-size company with resource constraints protect itself from this vulnerability?
One strategy is to have a strong cross-training program. Many companies give lip service to cross-training, and perhaps there is a designated “backup” to perform a key function when someone is on vacation for a week or two. But more often than not, the backup has just enough awareness to keep the ball in the air for a short time – until the primary job-holder returns to clean up the mess.
A more robust cross-training program has employees performing other functions for extended periods at regular intervals. This way, the backup develops a comfort level with the job while working side-by-side with their colleague to increase their knowledge and learn the practical ins and outs of another area.
Implementing a vibrant cross-training program demands commitment and discipline. Establishment of clear performance objectives is critical, as is assignment of responsibility and accountability for realization. This works best in a culture where colleagues are willing to collaborate and share information without fear of lessening job security. Done right, a cross-training program may even provide opportunities for advancement in organizations that otherwise tend to be flat and lean.
If you are concerned about succession or shielding yourself against the loss of key personnel, give us a call. We can help you design and implement a strategy that will protect and sustain your business.
Marc Alterman is the principal of MA33 Strategies, LLC, a consultancy dedicated to providing strategic planning and general business advice to entrepreneurs and executives. For help with your company’s overall strategic direction or other management challenges, contact Marc Alterman at marc.alterman@MA33Strategies.com.