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October 6, 2020 By mbeck

Cultural Fit is Key to Effective Successor Recruiting

Although finding the right industry experience and expertise is important when selecting a successor, they are relatively easy to find. The real challenge is finding someone with that background who also meshes well with your existing culture.

When a recruited successor fails, it’s generally because of one of two reasons. Either their leadership skills were poor (interpersonal skills, strategic thinking, business savvy) or they clashed with the culture of the company. Rarely – if ever – do they fail for lack of knowledge. (After all, smart people learn things quickly.)

Leadership skills can be objectively assessed fairly easily, and weak competencies can be addressed and improved. But cultural fit is a whole other matter. Fitting in with a company’s culture is a matter of personality and personal values, rather than skillset. Personality and values are innate to a person and can’t be learned or developed.

An organization’s culture is defined by the values and behaviors it lives by.
Here are some examples of the values and behaviors a company might live by:

Good Communication
Positive Attitude
Care About People
Mutual Respect
Professionalism
Integrity and Honesty

Dedication
Collaboration
Excellence
Transparency
Fiscally Responsible

Appreciation and Recognition
Fairness
Being Valued
A Safe Environment
Accountability

Before you can go about finding a candidate who is a close cultural fit, you must first have a clear picture of that culture. While all the values and behaviors above are admirable and positive, a well-defined culture usually consists of 5-7 traits. By selecting a handful of traits and focusing on them, it becomes much easier to live by them.

Once the pillars of a company’s culture are defined, it becomes much easier to screen potential candidates. (This is true for recruiting successors and also for recruiting any employees.)

Screening a potential successor for cultural fit is more of an art than a science. It’s like trying to determine whether someone is honest. You can’t simply ask them if they’re honest. You’ll always get the answer they know you want to hear.

Instead, you have to take an approach that indirectly reveals their personality and their values. That’s usually accomplished by a combination of asking good questions, being observant, and posing hypothetical examples. In truth, it takes years of practice to master the art.

If you’d like help finding and screening a successor for your business, please give us a call. It’s one of our specialties.

May 15, 2020 By mbeck

Which is More Valuable – Technical Knowledge or People Skills?

It’s a question I ask of every candidate and of every owner. When it comes to recruiting a successor, there’s only one answer. People Skills.

If you’re looking for a good “individual contributor”, then technical knowledge and skills are important. But since a successor needs to lead and make good decisions, people skills are more valuable. If someone is bright and has industry experience, they can easily learn whatever technical knowledge.

Someone with strong people skills will earn trust and respect. Someone with good people skills will appreciate the strength of a positive culture. Someone with goof people skills will be persuasive and get buy-in for his or her ideas. And someone with good people skills will forge positive relationships with employees, customers, and vendors.

May 13, 2020 By mbeck

What to Do If You Don’t Want to Sell and Don’t Have a Successor

At some point you recognize it’s time to get out of the business. Maybe you’re tired of the work or maybe you’re tired of the stress or maybe you’re just plain old tired. Regardless of the reason, it becomes time to get out. And although there are generally two paths to take, sometimes there are three.

The first path is to sell your company to an outsider or a strategic buyer. The upside of this approach is that you typically walk away with a check for the majority of the price (often you won’t get all up front) and you get to walk away from the business. The downside is that you put your hard-won business in the hands of a stranger to do with as they like – including changing the business and letting people go.

The second path is to sell your company to an insider – one or more individuals (family members or key executives) already in the company. The upside of this approach is that you’ll be leaving the company in the hands of someone who already knows the business, is aligned with the culture you’ve established, and is known by the people you employ. The downside is that you’ll almost never get a check for the value of the business and will have to rely on future cash flow in order to get paid. It also requires you to keep tabs on things (as best you can) to ensure they don’t go too far astray. Of course, there are several other approaches to handing your business off to insiders, such as an ESOP, but not every company is a good candidate for them.

But for some companies and owners there is a third path to take. The third option is to keep the business, have someone take over the running of the business so you can step away, and draw out the value of the business over time. The upside of this approach is that you retain full ownership and control of the company, the culture and the people remain intact, and you get paid in full over time. The downside, of course, is that it requires you to have/find someone to run your company with having ownership in it. Typically, they’ll need to be well-rewarded for doing a good job – which cuts into your profits but leaves you free from all but the most important decisions.

The challenge is that frequently, that key person doesn’t yet work for you. So, in order to use this third option, it becomes imperative to find and develop that key person. Here’s what you can do to accomplish that:

Step One: Develop an Ideal Successor Profile
Become clear on the competencies and personality traits needed in order to successfully lead your company. Competencies can be developed, but a person’s personality is what it is.

Step Two: Find and/or Attract the Best Candidates
Write a “job” ad that reflects the personality and cultural fit you’re looking for, not just years of industry experience. Sources of candidates can be recruiters, job boards, social media, and competitors. If you’ve crafted a position description well, you’ll attract great candidates and not just people looking for a paycheck.

Step Three: Evaluate and Assess Traits
Much of what you’re looking for won’t appear on a resume, so you’ll need to ascertain a candidate’s fit by a) asking good questions, b) listening well, and c) being observant. In addition, it can be helpful to conduct a social style profile assessment to help you determine their personality traits.

Step Four: Assess and Develop Competencies
Once you’ve chosen a successor, it’s essential to objectively determine their leadership strengths and weaknesses. A 360 assessment will reveal areas needing improvement. Competencies can generally be improved within 6-12 months. This development is best done by someone who is unbiased and objective, such as an experienced executive coach.

If you’d rather not sell your company to an outsider, the best thing you can do to maximize the likelihood of success is to become clear on what kind of person is needed at the helm and then objectively assess them, so their weaker competencies can be improved.

If you’d like help with any of this, we offer Successor Recruiting, Successor Assessments, and a Successor Development Program.

April 20, 2020 By mbeck

Should Your Successor Have the Same Personality as You?

Putting your company into the hands of a successor is a big step.

They need to learn the business. They need to become familiar with your products and services, systems, marketing, finances, etc. And they also need to develop their leadership abilities and owner mindset. (Those are more difficult to acquire.)

But as your gut tells you, even that isn’t quite enough…

You see, even when those attributes are developed there remains one more piece that needs to be in place to ensure success and business continuity. They need to have the right personality.

What is the “right” personality? That’s where things become interesting. It’s a challenge to determine whether they have the personality you’re looking for, but it’s an even a greater challenge to determine what that personality should be. Here’s why.

You’ve had the “right” personality for your business (or at least you developed it over the years). After all, your personality helped you to build your business to where it is today. Maybe you’re high energy or maybe you’re very disciplined. Maybe you’re excellent with customers or maybe you’re great at solving problems. Perhaps you’re supremely self-confident or maybe you’re very goal oriented. The list goes on.

But when it comes to choosing a successor, you first need to ask yourself whether the personality traits that got the business to where it is today are the same ones needed to take your company into the future.

It takes a certain type of personality to start a business. It takes someone with determination and the desire to succeed in order to persevere through the rough spots as the business takes flight. But are those traits still as important now that the business is well established? Maybe not.

When you first started out in business, you were required to wear many hats. But as a business matures, the need for versatility generally diminishes and the need for specialization becomes more important. So, you need to ask yourself, “Does your successor need to be the ‘rainmaker’ for the organization or is it more important to be the strategic visionary?” It’s an example of the important questions that need to be answered. And only you, as the owner, can answer them.

Often, answering those questions can be a challenge. One reason is that our tendency is to look for someone just like us. It’s human nature to do that. A second reason is that we have blind spots and can’t see what we’re missing.

Because of these issues, it helps to have an objective sounding board to talk things through with. Because this person needs to be unbiased, without an agenda, it helps to have someone outside of your company and outside of your family to strategize with.

Only after you decide on the kind of person the business needs in the future can you begin to evaluate and select the right successor. If you’d like our help with this, please contact us. We have assessments and years of business experience.