Family-Owned Businesses Need Strong Leaders and Succession Plans
Because organizations are measured by results, they are always looking for ways to improve the bottom line. Growth is one way to achieve this. What underlies the success of an expansion strategy is a company’s talent – especially the skills and behaviors of its leaders.
While many larger organizations have established leadership development programs and succession plans in place, start-ups and smaller family-owned companies struggle to make a case for spending money on developing the leadership skills of their best and brightest. Even if they have the financial means, they may not have the HR capacity to manage a program, and/or the metrics to determine if there is a significant return on this type of investment (ROI).
Best Practices for Strategic Leadership Development in Small Businesses
The truth is, smaller companies can create the same developmental opportunities for their managers and produce the highly-skilled, strategic leaders that can help their organizations grow. There are 5 best practices that have emerged from successful leadership training and development initiatives in large organizations that can guide smaller organizations as well.
Branding – An organization should predetermine the knowledge it wants its leaders to have, the essential technical and people skills, and the behaviors needed to perform effectively. While there may be a number of competencies that new leaders need to hone, chances are that smaller organizations may need to prioritize learning in order to design an affordable program.
Executive Endorsement – Top management should be publically committed to and involved in any development activity from the start. Things like sponsorship and mentoring can go a long way to add credence to a program and keep executives visibly involved.
Alignment – Practically, all learning should be built around business issues and solutions and should be measured in terms of strategic goals and objectives. Aligning leader behaviors to strategy creates a strong rationale and opportunity for application of learning.
Ownership and Accountability – The commitment and engagement of top talent in their own development elevates their experience and maximizes the outcomes. In addition, participants must be accountable for behaviors, performance, and identified outcomes. This means that participants must see the value of professional development for their careers – that there are some goals to work toward.
Measure Outcomes – Businesses must begin by defining the results they expect and then finding metrics to measure actual outcomes. In the short-term, evaluation may be informal and anecdotal when it comes to impacting the bottom-line. However, as the gap between desired behaviors and target outcomes begins to close and leader behaviors dictate strategic activities, the value of development becomes more apparent and ROI is increasingly measurable.
In the past, not all small to mid-sized organizations have considered a formal development program because they lack the strategic resources to support it. However, the need for businesses to differentiate themselves and surpass their competition presents a strong argument in favor of leader development, regardless of an organization’s size. Having the leadership that grows with the organization can result in short-term gains and in the long-term can increase retention and ensure a succession plan is firmly in place.