Glenn O’Grady highlights why succession planning and business continuity go hand in hand when it comes to navigating external pressures
How do you build a business that’s able to withstand external pressures such as a pandemic? Most of the advice I have seen has focused on the importance of businesses being agile so that they can adapt to the extenuating circumstances they currently face, but one key factor in insulating yourself from the unforeseen is by building a great team that can take your business to the next level.
When I started GuideSmiths in 2014, I had no idea what a chairman of a business was, let alone how to get there. When we became a business of scale four years later I realised that I was at the centre of way too much and my daily to-do lists went from enjoyable to incredibly stressful in a matter of months.
This is very common for founders (more so in services) where they are completely embedded in the business and not working on the business. If I could go back and tap myself on the shoulder earlier I would have built a succession plan into my strategy from the very beginning.
But where do you start? Everyone is different, so the order of the recipe may change but the ingredients are always very similar. My starting point would have two points on the agenda, ambition and clarity.
Ambition
When starting up a business, most will have a set of goals driving them towards some form of target, and it is vital that you understand and share the ambitions of the key people in your business.
I came to this realisation when I wanted to move to a new house. To make the move a reality, I needed money; inevitably, this money had to come from my business. I have a great business partner, but he didn’t know this and I couldn’t just go and raid the profit pot to satisfy my personal ambition. So, we sat down and translated each of our ambitions into a ‘personal goals’ roadmap over two years. Not only was it a great exercise, but the personal transparency also brought us closer together. We then spoke to our senior team members and ascertained their personal ambitions, where they see their future and what was required to get there. Not only did the exercise demonstrate that the business cared about our employees, it also helped us determine who showed leadership intent.
Clarity
We took all this information and translated it into our strategic roadmap for the business. Why? My goal can’t be to extract cash in dividends to relocate, while my partner has other priorities like recruitment in mind. If your goals do not align, it creates friction, which can seriously jeopardise the success of your business.
Aligned in our ambitions, we then created a business roadmap. One of the key elements was to step back out of leadership and grow the senior team into it. We would never have done this if we did not have total clarity on where we wanted to get, which brings me to the next steps: strategy and planning.
Strategy
Once we had clarity and our roadmaps in place, we started to really fine-tune our strategy. We are an agile software development consultancy, so five-year plans are a little alien to us. Instead, we chose to set very clear targets and create a one-year business plan that was co-created by ourselves and our senior leaders. We bought in a third party to deliver it in workshop form and help drive us to a collective output. In parallel, my partner and I were starting to manoeuvre the senior team into the leadership positions most aligned to their stated ambitions and skill sets.
This is a really key point: I didn’t just create a strategy for the team to adhere to, our senior team were assigned their parts of the business, such as sales or finance, and I just glued it all together with my deep knowledge of the business. At this point, I knew we had a team that was brought into a strategy they created, and we had a leadership team we knew could take the business forward without us. Part of the strategy was to clearly lay down to our team that our plan to step back was accelerating.
(At this point and as an aside, it’s important to take some time to understand what sort of business you are so that you can look for suitable candidates with character traits that match your motivations.)
Planning
Every business has a similar set of processes cutting across it. We broke these processes down and really had to focus on our individual roles and start to break the functions away from us step by step.
We spent time with the Leadership team being very clear in defining their roles and worked out the verticals where we needed to create a succession plan or recruit. It was important to remove ego from this step in the journey; this was ‘what was best for the business’ and not for the individuals concerned. My business partner and I stayed in tactical roles until we knew functions were fully handed over to the team and they were comfortable running things without us. Of course, we were only a Slack message or phone call away. The succession plan involved a breakdown of each of the roles and allocating time and budget to provide training plans and support where we felt between us there were areas for growth and improvement into the role.
Once this has all been achieved, you then need to execute your plan and know it’s working with metrics.
Board metrics
All founders have an innate sense of what’s going on in their business, but this isn’t much use if you’re trying to hand over to a senior team. You need clearly defined metrics at the board (or whatever reporting ceremony you have) level to understand if the business is performing against targets. We have put in place a comprehensive set of metrics and the Leadership team presents these to us monthly in a report and meeting. We can see with absolute clarity what is in our pipeline, our costs and financial performance, any people issues and so on…. I spend about an hour scanning through the report in advance of the meeting and instinctively know when something is not trending well. Without these measures, it will be a struggle to execute a succession plan at all.
Execution
Everything in your business is interconnected, therefore you cannot make changes like this without filtering in the costs to your budget, revising targets, possibly recruiting, paying for training, backfilling of roles or tasks for people stepping into new positions. You really have to build it into your strategy and budget at the macro level downwards. It’s a great thing to do and I’ve really enjoyed handing over the responsibility and putting a divide between myself and the day-to-day business activities. I’d spoken to several chairs who’d stepped back and absolutely none have regretted it, I just wish we’d done it sooner.
Glenn O’Grady is co-founder of GuideSmiths, a software consultancy expert in Node.js, microservices, greenfield development, DevOps, digital transformations, and legacy migrations.
