Succession Planning : Managing a Family Business (Part 3)
q Do you use job descriptions for your key personnel?
When you and your key personnel write descriptions for their jobs, you and they have a clear understanding of what is to be done and by whom. Such an understanding is essential in any small business. In addition, when, and if, a key person leaves, the job description is a helpful tool in recruiting and training a replacement.
q Do you periodically compare performance of key personnel with their job descriptions?
Periodical comparison of performance helps your key personnel to be efficient. It also helps to pinpoint weak spots for you and them to work on for improvement.
q Do you provide opportunities for key personnel to grow?
Your aim should be to help key personnel stay alert to new and more efficient ways to do things. Conferences, seminars, and workshops which trade associations and agencies sponsor can help key personnel to grow in their management skills and outlook. Rotating job assignments is a way to make key personnel aware of the problems that their counterparts face. Include in your budget an amount that can be spent during the year for personnel training and education.
q Do you face the issue when key personnel stop growing?
Some owner-managers try to avoid the unpleasant task of facing the fact that a key person has stopped growing. It may be the result of not matching personnel and the job. If there is little or nothing you can do about such a mismatch, face it and don’t waste time trying to do the impossible. On the other hand outside problems may be crowding in on the key person. Once you know why he or she stopped growing, you can determine what needs to be done. In some cases, additional training is the answer. In other cases, the motivation that results from broadened job responsibilities resolves the problem.
q Are there policies and plans for motivating employees?
Working through others is but no means an easy task. First of all, people are not puppets that can be moved by strings. Life may be a stage, as the poet said, but most people in small business are reluctant to submit to directors. Look for ways – good communications, respect for their viewpoint, incentive pay, and so on – to encourage people to want to do what you need them to do as employees in your company.
q Do you have adequate employee benefit plans?
This includes life and health insurance, major medical, and pension. Benefit plans often are necessary to meet competition for skilled employees. Substantial plans can help to hold non-family key individuals in a family-owned business.
q Do you have key personnel insurance on yourself and is your family protected against your untimely passing?
If these precautions are not taken, your death could result in the rapid dissolution of the business.
q Is there lack of communication among key personnel?
The routine passing of information among you and your key personnel may be all that you want it to be. But what about disagreement? Do key personnel refrain from expressing disagreement with you? Good communications should provide a forum for exchanging ideas and for airing differences of opinion. Possibly an early morning meeting once a week among you and your key personnel would provide a forum for exchanging ideas.
q Does your record keeping system present a realistic picture of your business?
q Is this the same type of record keeping system that other companies in your industry commonly use?
Appropriate records should give the owner/manager answers to questions such as:
Is there sufficient cash to operate the business?
To pay back the bank?
To pay taxes?
Is too much capital tied up in inventory?
Are accounts receivables being collected promptly?
Corporate records, if your company is a corporation, should be up-to-date including corporate minutes and record books. In checking out your record keeping, keep in mind that a poor system can result in excessive and meaningless information.
q Do you seek legal and financial advice on major transactions?
The fine print in contracts causes trouble for some small business owners. They did not realize until it was too late what they had agreed to do. Legal and financial advice at the appropriate time can help the owner-manager to comprehend the full scope of your company’s contractual obligations and allow you to make decisions based on facts rather than assumptions. Whenever possible use your standardized contract in making contractual obligations.