Developing a Management Succession Plan (part 2)

(Continued from part 1)

When you have a clear picture of your responsibilities, evaluate who else in the organization is capable of taking them on. Make a list of the top tasks you perform. Next to each one, write the name of the person in your company who would step up to manage the task if you were unable to come to work for a month. Then rate your confidence in that person’s knowledge and ability on a scale of one to five, with one representing certain failure and five indicating confidence that they could successfully take responsibility for the work today.

If you see a lot of fives on your list, you are well positioned to begin delegating responsibilities to your staff. Threes and fours demonstrate potential to train the staff members in question to take on more responsibilities, and ones and twos represent areas in which your company may struggle when you leave. These will need to be addressed either by training current staff or bringing in additional managers.

Next, make a list of the skills and responsibilities of each manager who reports to you. Who would take on their duties if those people were to leave? Are the most important managers in your company satisfied with their work and salaries? Do they have non-compete agreements?

Consider what you may need to do to secure your management team. They have helped build your company’s value, and potential acquirers will want them to continue doing so. Conversely, if you have middle managers who are underperforming or failing to add value to the company, now is the time to consider replacing them.

Companies with strong management teams attract a lot more potential buyers than those that require experienced owner/operators to step in and take the reins. Crafting a capable team will not only increase the value of a future sale – it will also bring the benefits of increased stability and profitability in the years leading up to a sale.

If you are considering selling your business in the future and would like to learn more about planning for a future sale, we invite you to get in touch with us for a confidential, no-obligation discussion. Email info@asgpartners.com or call us at 425-450-4800.


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