Should you hire a manager or leader as part of your succession planning? Before you make that decision, you need a pretty good idea of what your exit plan is. Once your objective is set, it’s one of the answers that becomes obvious.
A manager is someone who gets other people to do their jobs. A leader is someone who gets other people to want to do their jobs. The difference is profound. I’ve written previously about the difference between an SIC (Second in Command) and an SIT (Successor in Training.) The SIC is intended to complement your skills. An SIT is being taught to duplicate them.
That’s why it is never too early to begin planning your eventual exit. Every company needs to build a management team, but not every management team is built for leadership. The sooner you determine your eventual goals as the owner of the company, the more able you are to build a team that gets you closer to those objectives.
Manager or Leader? Manager
A Second-in-Command backfills those areas where you are less able, or less inclined, to manage. In Gino Wickman’s parlance, the owner is the visionary and the SIC is the integrator. In my book Hunting in a Farmer’s World, I refer to them as hunters and farmers. The owner decides what is to be done, and the integrator sees to it that the employees execute those tasks.
In an SIC you are looking for someone who draws the most satisfaction from a job well done. He or she usually responds to metrics. Generally, they can keep the business going for an indefinite period of time, but are unlikely to take it in new directions. A most desirable trait is a willingness to do the same job for another owner.
If you plan to eventually sell the business to a third party, retention of your SIC is a critical component of company valuation. We often recommend “stay” bonuses. These are designed to lend confidence to a potential purchaser, by tying a portion of the sale proceeds to an incentive for the SICs continued tenure.
Manager or Leader: Leader
If you plan to sell the company to employees, or even to step back and become a passive owner, your selection and training of an SIT are even more vital. In this case, you want someone who has a vision of his or her own. It can’t directly conflict with yours, of course, but you have to be willing to let the SIC have some influence on why the company runs the way it does, not just how the work gets done.
The SIT is usually motivated by the concept of ownership. This could involve purchasing the company from you, acting as the focal point of a wider employee purchase, or a minority position. In the latter case, the SIT expects to share in the proceeds of a successful sale.
The biggest benefit of having a Successor-in-Training is the flexibility it gives you in planning your exit. All avenues of transition are still open to you. Your SIT can continue to build value after you step back, take the company off your hands, or act as the bridge for new ownership.
Of course, a good SIT will have to get an SIC of his own…
Often, an NQDC is funded by an insurance policy with a death benefit and an increasing cash value. It is owned by the company, which pays the premiums. At retirement, the employee receives the paid-up policy. This approach has the added benefit of lending confidence to the process, as the employee can see the funding and growth of the future benefit.
I talk to at least a dozen employers a week, and all are complaining about the lack of qualified applicants. Several have raised their starting wage rates multiple times, with no discernable change in the flow of applicants.
How is their remote presentation? Unless they are in a job that is strictly production-based, most will interact with customers, vendors or other employees. Do you have standards for their workspace and their appearance on video?
My message is simple. The downside of remote work is that it turns employers into a commodity. A remote employee’s home office looks exactly the same today as it did yesterday. It will look the same tomorrow. If you want to maintain any hope of competing with the giants, the faster you restore in-person contact with your employees, the better chance you will have.
Love this article … every Coaching Client I have is having issues finding qualified candidates at any price. I tell them they will need to “buy” their “A” employees. All the “A’s” are employed. The mention of the “no shows” to interviews is also a new phenomenon.
great article, Posted it to LI.
As always, John, you’ve avoided offering the simple or obvious answer and explained another complex issue that has a multitude of causes. Thanks for taking the time to put this together.
My clients are also experiencing interview no-shows as well as people who sign up to work and then disappear after 2 or 3 days and are never heard from again!