Memorable Quotes From The Video:
Transitioning a business to a new generation of leaders, no matter what decade you are in, has always been a multifaceted, emotional and intricate process—one that is easy to put off due to the anxiety it can generate. On that front, the landscape in the Built Environment hasn’t changed much since we wrote this article. In the last three years, the industry has seen an even more dramatic shrinkage of the talent pool, and there are still relatively few options to move equity in the construction industry. According to our most recent data, only about 5% or fewer firms in the industry are salable and around 60%-70% can sell internally. This leaves 25%-35% of firms in a position where they must liquidate.
As a rule, the succession process is much bigger than simply appointing a new leader to a role. It also often involves making changes in the organizational structure, transitioning internal and external relationships, and making tough decisions around the ownership transition. This process should be set in motion seven to 10 years prior to the official passing of the leadership and/or ownership baton (especially if you have never done it before).
While this article was written in a strong market that is now slowly cooling off, the key steps for the continuity of a business remain constant:
- Clarify your vision: Make sure you are crystal clear on where you want your business to go, even after you leave.
- Understand the necessary leadership roles: Given the vision, what are the requirements to lead?
- Evaluate potential successors rigorously: More than anything else, the continuity of the business depends on the quality of future leadership.
- Accelerate future leader development intentionally: To ensure readiness, you need more than just organic growth.
- Don’t spend all your time defining what you are moving from (the business); also clarify what you are moving toward (after exiting the business).
This article was originally published March, 2017.