The Strategy Behind Succession Planning

Too many think of succession planning as having application only in family-owned businesses or in large enterprises.

In fact, succession planning should be a part of every company’s Strategic Plan - your vision of where the company will be going in the future (with - or most likely, without you.)

Succession planning is a part of the process of preparing for the future of your company. And, while most succession planning focuses on the CEO, virtually every key position and key person in your organization is a candidate for a succession plan.

To effectively implement a succession plan, consider some of the following issues:

1. What is the long-term direction of your company? Do you have an effective strategic plan guiding your course and direction? Is it documented? Is it available to share?
2. What are the key areas which require continuity and long-term people development?
3. Who are the key people you want to develop and nurture for the future?
4. How does the concept of succession planning fit into your strategies? Are you concentrating your efforts in the areas where the returns will be highest?
5. What are the career paths that your most talented people should be following? Is each path customized to fit the abilities and talents of the people involved
6. Should you wait for openings to appear before promoting someone, or should you make opportunities for each person as they grow and mature, so that you can keep them challenged and stimulated, and not lose them to other, possibly faster-moving companies?

BOTTOMLINE: When done with your organization's strategy in mind, succession planning will bring the peace of mind that senior management should have, based on the understanding and expectations of its future leadership.

Six Disciplines Explained

Watch this short video by Ken Hilty, General Manager of the Six Disciplines Leadership Center of Northeast Ohio (Cleveland), as he briefly describes the benefits of Six Disciplines.

If It Works - Keep Doing It

Over at QLog, Thom Quinn presents this short article focusing on "Myth Three: None of the techniques from the 20th century work any longer"

His premise?

Here are some just a few ‘ancient’ strategies that still have great value:

• Mission Statements/Purpose Statements
• Monthly/Quarterly/Annual Goal Setting
• Daily Task Lists with Ranked Priorities
• Urgent vs. Important
  

"I am willing to bet that 99 times of out 100, someone employing only techniques developed 40 years ago would be more productive than someone using no techniques whatsoever!"

BOTTOMLINE: "Do not shun an idea just because it turned 50 last week. Instead of asking the question “How old is it?” I suggest asking “Does it work?”

Two Critical Phases of Growth

Jeff Cornwall, over at the Entrepreneurial Mind, shares this story from StartupJournal about there being two critical phases of entrepreneurial growth:

1. The first is aligning your business to the market properly before you even open the doors. This is the process of opportunity assessment.
2. The second critical point is when the business hits its growth phase.

According to Jeff, "During growth, both the business and the entrepreneur have to go through transitions. For the business, the entrepreneur has to build systems and processes that can handle processes that the entrepreneur managed himself when the business was smaller. And that leads to the second transition. As the entrepreneur builds more and more of the day-to-day details into systems and delegates responsibility to the expanding team, his job must change. As seen in the case at StartupJournal, the transition from being mostly a "doer" into becoming a "real CEO" can be one of the biggest challenges an entrepreneur can face."

BOTTOMLINE: In the growth phase, the entrepreneur/CEO must make the transition (To use a Gerber phrase) from working "in" the business - to working ON the business." That means building processes that others can be accountable for as the business grows. Until now, there's only been disconnected "systems" to help growing organizations to approach this in a systematic fashion.

Six Disciplines is a systematic, repeatable and cyclical business-building process, that includes practical software systems enabling top-performing organizations to document and improve processes, tying together the core business fundamentals (strategy, planning, measurement, execution, learning and leadership) ith measures to monitor change and improvement. Six Disciplines Leadership Centers provide the on-going coaching and strategic advisory services that CEOs and their organization's need during this critical business growth phase.

Video: The Idea Behind Six Disciplines

Watch this streaming video of Gary Harpst, CEO and Founder of Six Disciplines Corporation, as he describes how the idea for Six Disciplines came about.

(NOTE: Video is in Windows Media Format )

Company Culture Vital in Recruiting Employees

According to new research from conducted by NFI Research, the three most effective incentives for recruitment were:

1. Company culture (59%)
2. Organization's reputation (57%)
3. Stability of the company (54%)

For retention of valued employees, the top three incentives were

1. Company culture (57%)
2. Stability of company (50%)
3. Flexibility (44%)

BOTTOMLINE: There was no significant difference by company size. This means it's important for large enterprises - and for small businesses. Start working on your company's culture today....a good start? Read Six Disciplines for Excellence.

Uncovering Growth Opportunities

Sometimes uncovering or building growth in mature industries means more than simple product extensions or acquisitions.

The answer?

Develop "growth platforms" that extend your business into new areas, according to this article in Harvard Business Review called "Building a Platform for Growth"

The Factors of Leadership Motivation

weLEAD magazine offers this take on "The Factors of Leadership Motivation" by Brent Filson:

His premise?

"To understand motivation and apply it daily, let’s understand its three critical pillars:

1. Motivation is physical action.
2. Motivation is driven by emotion.
3. Motivation is not what we do to others, it's what others do to themselves.

BOTTOMLINE: "By applying motivation the right way (understanding and using the three pillars, can serve you well in many powerful ways throughout your career."

Good Performance Is No Longer Enough

In bookstores Gallup Press, "Married to the Brand: Why Consumers Bond With Some Brands for Life," by William J. McEwen, draws on more than 60 years of research from The Gallup Organization to examine how and why we connect to the products we use and the brands we buy.

So why is this important for organizational performance?

This research demonstrates that customer satisfaction is woefully insufficient when the goal is an ongoing exclusive relationship between a customer and a brand.

"Good" performance is no longer enough, and one purchase in no way guarantees that another will follow.

Instead, an enduring (lasting) relationship between a company and a customer has four prerequisites. Together, these add up to an emotional connection that is both powerful and profitable:

• Confidence: Customers must feel that a brand is one they can always trust and one that will always deliver on whatever it promises.
• Integrity: Customers must feel that the brand treats them fairly -- as they've earned the right to be treated. And they must believe that the company stands resolutely behind its products and services. They must feel that if a problem ever arises, the company will fix it.
• Pride: Customers must feel proud to be associated with the brand -- proud to be known as a brand owner, shopper, or user. They must be convinced that the brand and its representatives will always treat them with respect.
• Passion: The customer must feel that the brand is irreplaceable in their lives and represents a perfect fit with their needs, whether those needs are tangible or intangible. In fact, they should feel that their world really wouldn't be the same without it.

BOTTOMLINE: These four aspects of an enduring customer relationship must be reinforced wherever, whenever, and however companies touch their customers. At its very core, however, the relationship between a brand and its buyers is visceral and emotional. It derives not just from the product and its features, but from the experience that surrounds its purchase and use.
It is a continual reminder to ...Be Excellent™.

Six Essential Roles of the CEO

From the May 2006 issue of Vistage International's newsletter to CEOs, comes this piece on the "Six Essential Roles of the CEO."

Exactly what should the CEO focus on? The role of the CEO encompasses six essential functions:

1. Strategist
2. Ambassador
3. Inventor
4. Coach
5. Investor
6. Student

BOTTOMLINE: "Most CEOs know what they need to do to fulfill their role. The problem is they allow themselves to get sucked into doing other people’s jobs. Focusing on the six key roles and your success profile will go a long way toward keeping you on track and ensuring that others are doing what you pay them to do.”

Lessons from Bill Gates

Bill Gates - the world's richest person, and arguably the person many "love to hate." But beyond "all of that".....he's one of the most studied persons in business

Interested in taking some business lessons from Gates?

• Lesson #1: Stick To Your Vision
• Lesson #2: Develop an A-Team
• Lesson #3: Think Long-Term
• Lesson #4: Make A Strong Recovery
• Lesson #5: Never Stop Learning

Eight Attributes of Management Excellence

In the business classic "In Search of Excellence," authors Tom Peters and Bob Waterman described their take of the Eight Attributes of Management Excellence, based on McKinsey's 7-S Model.

The Eight Attributes of Management Excellence include:

1. A Bias for Action
2. Be Close to the Customer
3. Autonomy and Entrepreneurship
4. Productivity through People
5. Hands-on, Value-Driven
6. Stick to the Knitting
7. Simple Form, Lean Staff
8. Simultaneous, loose-tight Properties

Innovation's Biggest Paradox

From FastCompany's recent article, "The Beauty of Simplicity":

"It is innovation's biggest paradox: We demand more and more from the stuff in our lives--more features, more function, more power--and yet we also increasingly demand that it be easy to use. And, in an Escher-like twist, the technology that's simplest to use is also, often, the most difficult to create. "

And....to quote Albert Einstein:

"Everything should be made as simple as possible, but not simpler."

BOTTOMLINE: Simplicity is both sacred and central to a organization's competitive advantage. And no doubt about it, the market for simplicity is complex. Start by simplifying your company. "Less isn't more; just enough is more."

5 Startup Mistakes

CNN/Money Magazine offers these "5 deadly mistakes when starting a business" which include:

Here are five common mistakes to avoid, so you can build a successful business:

1. Too little cash.
2. Thinking small.
3. Skimping on tech.
4. Underestimating the importance of sales.
5. Losing focus.

BOTTOMLINE: At Six Disciplines, we assist organizations in understanding and preventing these 5 mistakes (and many others) - by concentrating on #5 - Losing Focus. All businesses lose focus at one time or another. By creating a vision, mission, strategic position - then establishing goals, and individual plans to execute on a daily basis, organizations develop their core competence to become more skilled - and disciplined - in their approach to strategy execution. By doing this, they do NOT lose focus.

The Half-Truths of Leadership

"We are obsessed with leadership. Thousands of studies and books are devoted to it, and we still want more. So much is written about leaders because we believe that our fate, and the fate of our organizations, is in their hands and ought to be."

In fact, leaders have far less control over organizations than people believe, but they can be more effective if they understand leadership myths and use them to their organizations’ advantage. This recent article on the "The Half-Truths of Leadership" from the Stanford Business Magazine spells it out.

What Should Good Leaders Do?

1. "Everyone expects leaders to matter a lot, even as they have limited actual impact. Leaders need to act as if they are in control, project confidence, and talk about the future, even while recognizing and acknowledging the organizational realities and their own limitations.
2. Because leaders succumb to the same self-enhancement tendencies as everyone else, magnified by the adulation they receive, they have a tendency to lose their behavioral inhibitions and behave in destructive ways. They need to avoid this trap and maintain an attitude of wisdom and a healthy dose of modesty.
3. Because the desirability of exercising total control is itself a half-truth, effective leaders must learn when and how to get out of the way and let others make contributions. Sometimes the best leadership is no leadership at all.
4. Leaders often have the most positive impact when they help build systems where the actions of a few powerful and magnificently skilled people matter least. Perhaps the best way to view leadership is as the task of architecting organizational systems, teams, and cultures—as establishing the conditions and preconditions for others to succeed."

(Excerpted by permission of Harvard Business School Press. Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, by Jeffrey Pfeffer and Robert I. Sutton. Copyright 2006 Jeffrey Pfeffer and Robert I. Sutton. All rights reserved.)

The Most Influential Business Books

Forbes’ has published their list of the 20 Most Influential Business Books which was compiled in 2002. The list of book is worth considering if you’re looking for a good business read.

Interesting - but not surprising --7 of the 20 books are referenced in Six Disciplines for Excellence.

SWOT Analysis - Scanning Methods

In the most recent Harvard Business School Working Knowledge issue, the authors of Peripheral Vision: Detecting the Weak Signals that Will Make or Break Your Company offer this advise about Scanning for Threats and Opportunities.

Their premise?

• All managers scan, but they often do so passively.
• To see more of the periphery, an organization has to change how it scans.
• There is a portfolio of scanning methods to capture and amplify the weak signals within targeted zones of the periphery: inside the firm; customers and channels; the competitive space (competitors and complementors); technologies, political, social, and economic forces; and influencers and shapers.

BOTTOMLINE: "To improve the ability to capture the peripheral insights within the organization, there must be (1) appropriate and visible channels for sharing information, (2) wide knowledge of the questions guiding the scan, and (3) incentives for actually sharing useful information. People must engage in frequent and free dialogue for the necessary connections to occur spontaneously. This, in turn, requires a culture of trust, respect, and curiosity, plus the recognition that information sharing is crucial. Too many companies still operate in a mode where information is shared on a "need-to-know" basis only."

Why Organizations Can't Retain Employees

Gautam Ghosh posted his thoughts on "10 reasons why organizations are not able to retain employees."

1. People don't get integrated.
2. Performance goals are unclear.
3. Development is always tomorrow's job.
4. The personal touch is missing.
5. Reward systems are not transparent.
6. Percieved equity of reward systems is low.
7. Goal setting process is not scientific.
8. External equity is missing too.
9. No communication around total value.
10. No career planning.

Eight Things Leaders Never Do

J. Timothy King offers his assessment on the "Eight Things Leaders Never Do."

1. Leaders never say it can’t be done.
2. Leaders never focus on the past.
3. Leaders never resist change.
4. Leaders never belittle or scold their constituents.
5. Leaders never assign blame.
6. Leaders never tell people what to do.
7. Leaders never talk when they could be listening.
8. Leaders never fight.

Leadership Capability - And Profitability

The connection between profits and leadership has been a missing link in most leadership research.

Recently, the Ken Blanchard Companies identified connections between leadership capacity and organizational vitality -- research that allowed Scott Blanchard and Drea Zigarmi to examine what it has dubbed the Leadership-Profit Chain.

Key findings from the research:

• Leaders who hold people accountable and ensure effective, productive behaviors in their people are the most effective influencers and drivers of organizational results.
• Equally important is a leader’s ability to affect the mood, attitude and engagement of employees and the overall culture of the organization through a specific chain of events that are implicitly linked.
• Employee passion results from the employee’s positive experience and overall satisfaction with the organization, its policies, procedures, products, and management practices, and directly predicts customer devotion and organizational vitality.
• Hard measures of employee passion include retention, absenteeism, tenure, and productivity.

Creating an organization that is successful and effective is an inside-out proposition. The quality of the culture, the quality of management practices, and the alignment of these practices with key strategic initiatives rests with leadership.

According to Blanchard and Zigarmi, leaders also hold the key to organizational vitality—the creating of an environment that allows employees to win and be passionate about what they do. By taking care of employees, leaders establish an environment in which the employees take care of the customers at a level that causes the customer to want to return year after year.

BOTTOMLINE: When managers focus their attention and emphasis only on organizational indicators of vitality such as profit, they have their eye on the scoreboard and not on the ball. Profit is a byproduct of serving the customer, which can only be achieved by serving the employee.