When you work for a small business, you have more than a financial interest in seeing your business succeed. With all the goals your company has in mind, it’s easy to forget about what should happen to your business when the boss isn’t around. Whether they decide to leave for greener pastures (like starting another business), need to go on a sabbatical, or you just want to uncover opportunities for your current team, you need a succession plan, and two-thirds of businesses owners don’t have them.
Whether you’re looking for a simple hierarchy among your employees or want to know who will run things when someone takes a leave of absence, there are several ways to organize your company’s succession plan. What should small businesses look out for, and what should they embrace?
Top-down Should Not Be Strict
Founders are the boss. There isn’t a lot of question about that. But how should they lead? Are they the unquestionable leader of the enterprise, or do they want employees to lean into their work and improve the company along with them? If they’ve placed themselves at the top of your company’s structure, remind them it pays to be loose. Speaking on the idea of top-down management and its effects on employees, Barry Moltz ( @barrymoltz ), small business consultant, offers the advice of giving your managers a little more freedom.
“Unfortunately, over time, this strict structure can stifle innovation and creativity in rapidly changing markets. The key to creating a strong hierarchical organization is to task each manager with setting departmental goals within the company’s overall mission. They may work with you on what needs to be accomplished, but they’re responsible for how it will be achieved. As a result, they’re given their own budget and hiring authority for their team.”
Finding People to Suit Your Structure
In a small business, every hire counts, and if you have a good structure, you want to ensure the skilled employees you’re looking for also match the kind of structure. You should also be willing to pay a little extra for people with skills. In fact, 27% of employees say the reason for the skills gap in the workforce exists because employers aren’t willing to pay enough for skilled workers.
Tweet This : 27% of employees say the skills gap exists because employers won’t pay enough for skilled workers.
The best way to integrate a skilled worker into your creative and loose hierarchy is to look for T-shaped employees. T-shaped employees have a small amount of knowledge in several fields or disciplines, but have a deep focus and expertise in a particular one. For a small business, this means hiring people who’ve dipped their hands in different pots, and can adapt on-the-fly to your evolving structure, but also have the abilities to fulfill the job you’re looking for . Depending on the role, you should consider hiring STEM and Humanities graduates for early roles to create a team with a combination of communication skills and expertise in particular fields.
Planning for Long-Term Succession
Succession planning is about more than hierarchy. Even if you think you’ve found your one true business love, your founder may not think so. As an HR pro, you must think ahead, considering what will happen once there’s a change at the top. Others will eventually begin to take the lead when someone leaves, so it’s important to have a plan in place before you need one. Most small businesses cannot rely on being bought out by larger companies for a high enough price to replace the revenue made in a single year, so if you’re serious about working for a small business, you must plan for the long haul.
And even if it may be tempting to plan a business around the owner’s family, you may want to advise against it. The rosy image of a parent handing down their business to their children is a nice one, but it does not tend to work out. Companies handed down this way have a 30% success rate through the first to second generations, and only a 12% rate for second-to-third transitions. If you want your business to survive long-term, thinking outside familial ties is likely your best bet.
Even if it’s loose and relaxed, companies need structure, and it may not always be easy to convince your few employees to follow a lead, especially if it’s not yours. But with the right structure , employees, and plans in place, there’s no reason your business can’t succeed.