Is your company structured to deal with the passing of a key person? Or, if that prominent person is you, have you established the framework to enable your business to steadily move forward?
Some notable business leaders have recently passed. One is Steve Jobs, founder of Apple. Another is Al Davis, longtime owner of the Oakland Raiders football team. Two others were important members of our metalworking community: Teruyuki (Terry) Yamazaki, chairman and CEO of Yamazaki Mazak Corporation, and Earl E. Walker, CEO of Carr Lane Manufacturing Company. In each case, the leadership and strategic vision they provided paved the way for their companies’ success over the years.
Of course, tragedy can strike an organization at any time, and the loss of a leader, especially a skillful one, can disrupt the management of even the most stable of companies.
The businesses that are in the best position to carry on in a steady fashion are those that have a thorough plan in place to directly address such unfortunate situations while keeping the company on track. Sadly, 20 percent of nearly 1,100 businesses of all types that participated in a recent survey say they have no succession plan in place for their senior-level personnel.
The study was conducted late last year by the Corporate Learning Solutions division of the American Management Association. The results from that survey also revealed that only 14 percent of companies say they are “well prepared” to deal with such a key leadership loss while another 61 percent say they are “somewhat prepared.”
“The survey findings deserve senior management’s close attention,” says Sandi Edwards, senior vice president for Corporate Learning Solutions. “There is little consensus among the organizations we surveyed on what succession planning actually consists of, or even what it
ideally ought to be. Moreover, this uncertainty is found at a time when an overwhelming majority of companies understand that given the competitive nature of the global economy and fast-changing business conditions, a smooth management succession is now more important than in past years.”
A prudent business will formulate a strategy to manage the sudden departure of a key person. Without this type of arrangement in place, an organization is likely to face not only the emotional strain of such a calamitous event, but also a potential financial crisis.
Admittedly, there are reasons why a shop delays establishing a succession plan to deal with an unexpected loss. These days, a shop owner’s plate is full dealing with day-to-day business operations. Plus, directly addressing succession planning can be understandably uncomfortable, especially for those in good health. With that said, consider the ramifications of not preparing your business to move on after the loss of its leader. Misfortunes happen, but you can help minimize the impact on your family, business and employees as they heal.