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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Sandra Davis
November 2002

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Planning your company’s future, without you

TO TACKLE SUCCESSION planning, small-business owners need to confront assumptions that keep them from taking action. Three critical assumptions can cause owners to miss the boat in succession planning. You may discover that one or more of these apply to you and your business.

Assumption No. 1: Succession planning is only about replacement.

Many CEOs and leadership teams erroneously consider succession planning to just be about replacing the top seat, the CEO’s job. A small company may have a “disaster plan” for what to do if something terrible happens.

No doubt it”s important to know who will likely replace the CEO if something happens or when she or he decides to retire. But it”s equally important to know who the leaders and key players will be in your organization at all levels so that you can be developing those individuals consciously.

Assumption No. 2: Succession planning focuses solely on leadership.

Without a doubt, leadership is front and center in succession planning. We need to be asking questions like, “Who is being developed for future leadership roles, who has potential to lead and what kind of leadership does the company need in the future?” But many small companies trade on special competencies or expertise that make the business successful.

Not every key role in a small business trades on leadership. Think of your own business. You probably have people with special operational, administrative, technical or customer contact roles that are vital to your success. What are you doing to ensure you have the talent for these critical roles in the future?

Assumption No. 3: Succession planning doesn”t work well in small companies.

A head-in-the-sand assumption to be sure, but the reality is that most small companies don’t have the time, dollars or talent to create the kind of complex systems found in large companies. It does seem daunting: Identify needed skills and competencies, review talent, track talent within the employee database, appraise performance, rate potential, have development plans for all high potential staff, fill openings based on development needs and annually measure bench strength. Luckily there are ways to adapt processes for the small business.

Talent talk The best succession planning efforts involve leaders or leadership teams talking about talent in their organization. Nothing can happen without thoughtful conversation about performance, potential and development. But nothing will happen unless the leadership team as a whole can see the business and strategic reason for paying attention to the issue.

So what are the critical steps if you decide to embark on a succession planning effort? Five follow:

Identify a desired future. Yes, this sounds like strategic planning, and it is! The most effective succession planning system comes from understanding the organization”s business, strategy, industry, competitive differences and customers. This strategic context relates directly to the skills that future leaders will need.

Has your leadership team established a set of leadership competencies that represent a shared understanding of future leadership demands? If not, that”s a place to start. If you don”t have a set of these, spend some time developing them for your organization.

Has your team decided which roles are central to success in product innovation, operational excellence or customer intimacy? Maybe your business success rests on sales talent; maybe it rests on exceptional customer service or on technical expertise. What does it rest on and what are you doing collectively to make sure you have a “talent pool” of people who can deliver this consistently?

When you”re done with this discussion, you should have a list of core skills that are at the heart of business success and an idea of which jobs are so vital that you always want to have a ready supply of replacement talent.

Create a talent review system. Now that you know what your current and future requirements are, you are ready to design the process itself so that the leadership team can hold discussions about key individuals. We call it the “talent review system.” It focuses on these questions:

For which positions are we going to consider identifying replacement talent? Who are some of our key players for now and in the future that we want to make sure we are developing? How deep or wide do we want our discussions to go?

Are we large enough to have a “cascading” system, meaning that top leadership talks about people below them and the next level of management concentrates on the people reporting to them?

What kind of outcomes or actions are we expecting from ourselves following these discussions?

Conduct a talent review meeting. This meeting is the event most associated with effective succession planning systems. Reviewing talent is not a private act. It takes a team. Leaders and managers need to develop a common understanding of the talent that exists in the organization and assume collective responsibility for developing it. That won”t happen without face-to-face conversation.

People prepare for the meeting by evaluating individuals who report to them in terms of their performance and potential. These meetings take time. A good discussion about a group of future leaders or key contributors may take an entire day or more. In a small business, it”s not uncommon, once the team has taken a look at its current talent, for someone to say, “We can”t grow it all.” So succession planning can include strategies for bringing in additional talent as well as growing it from within.

Develop talent. Here”s where the rubber hits the road. And here”s where many organizations succumb to good intentions. If all you do is talk about talent and never do anything to build it, you will likely find your business in a talent crisis some day. While training programs can be one answer, they are not always the best way to accelerate someone”s development. More often, development and change happens by providing real-time job experiences and assignments that are themselves developmental and growth producing.

Developmental experiences can be designed and provided to individuals in their current roles or through reassignment or job rotation. In a small and growing business, development goals could be part of finding someone for a task. How often do you hear the question, “Who can we get to do this?” Imagine what you might be able to build if you thought: “Who needs this kind of experience and can get it done?”

Measure results. From the outset of any succession planning initiative, it”s important to specify the results you want. What indicates success? Indicators could include increases in promotions, in retention rates for key individuals, in the number of written development plans that exist and are being used, or in the number of people identified as being ready for larger roles.

Test yourself against the three assumptions: Are you letting some myths get in the way of taking action? Then consider what to modify for your circumstances.

contact Sandra L. Davis, Ph.D., is the CEO of MDA Consulting Group, a leadership consulting firm headquartered in Minneapolis, where she specializes in talent management issues and coaches senior-level executives: 612.259.4235 or sdavis@mdaconsultinggroup.com