Who's Next in Line? 5 Tips for Succession Planning in Self-Storage Family Businesses

All family businesses should have a solid succession plan in place, one that helps the senior generation leave with ease while welcoming the well-prepared next generation. As self-storage owners plan their companys future leadership, they should keep these five points in mind.

June 16, 2013

5 Min Read
Who's Next in Line? 5 Tips for Succession Planning in Self-Storage Family Businesses

By Lois Lang

When it comes to succession planning for a family business, one thing is certain: Most family business leaders dont do it, they dont do it well, or they wait to do it until its too late. While the CEO longevity in non-family businesses is an average of six years, for a family-owned business, CEOs tend to stay for 20 to 25 years. Sure, that long tenure contributes to leadership stability and consistency, but it can also fuel flat growth, narrow business focus and decrease leadership drive.

Additionally, when the CEO and other top-level executive family members do not step aside in a timely manner, it causes a high level of frustration in the next generation of staff whos ready to charge forward and make their mark. Once it becomes clear the children might reach their mid to late 50s before taking over, it becomes hard to hold on to the ambitious ones. Thats why all family businesses need to have a solid succession plan in placeone that helps the senior generation leave with ease while welcoming the well-prepared next generation.

While succession planning can happen at any level within the organization, we commonly think about the top five key positions for a written, structured succession plan. As you plan your companys future leadership, keep these points in mind.

Think Beyond Seniority

Many family business executives choose future leaders based on seniority, such as he or she is the oldest, so he/she will be our next CEO. Of course, a single owner can make the easy decision to pass the business leadership to the child of his choice.

But this easy choice can backfire if the adult child or the one with the most seniority hasnt gained respect from other family members and employees. In other words, sometimes the easy or obvious choice isnt always the best one. Therefore, be open to broadening your search beyond the next of kin.

Evaluate Key Criteria

You should also embrace a more professional process of skill evaluations, performance assessments and reviews of career history. The more thoughtful, objective and inclusive the process of bringing on the next leader is, the more likely the transition will be embraced.

Succession readiness calls for a written transition plan and an individual development plan for the future CEO within three years of the planned succession date. Implementation of the plan may involve identifying other executive team members with succession needs, building a coaching plan, and providing stretch assignments in different functional areas of the company.

Rank possible successors based on key criteria. Rather than just appoint the next oldest family member to the leadership role, consider creating a list of all the possible successors and rank them from 1 to 10 (with 10 being highest) in each of the following areas:

  • Past work experience and advancement history

  • Education

  • Geographic mobility, if appropriate

  • Learning agility

  • Prior leadership positions including size and scope of leadership responsibilities

  • Advancement potential and desire

  • Interpersonal skills

  • Assessment of the individual compared to the companys values and leadership competencies

  • Past performance ratings

  • The ability to take risks

  • Decision-making ability

  • Problem-solving ability

Doing this for each potential successor will help you see whos best positioned to move the company forward. Finding a successor with the right mix of skills, attitude, drive, character and experience that matches your business will ensure the family company succeeds for the long term.

Groom the Next Generation

Once you have a successor in mind, offer him additional development through such things as job rotations, stretch assignments, additional profit-and-loss responsibility, and more exposure to customers. The more emphasis you place on prepping the next leader, the smoother the transition will be.

Consider a Non-Family Leader

When a family business member utters the words, Lets consider a non-family CEO, the first reply is usually a colorful, No! However, a non-family CEO frequently brings diverse, in-depth experience to drive business growth, bringing professional alliances, partnerships and strategy opportunities. He can be a great mentor for the next generation of family leadersoften known as a bridge CEO from one generation to the next. While the family may hold all the stock, its critical to develop a performance incentive that will reward and retain the non-family CEO and an employment agreement that will fairly treat and protect the CEO.

Choose Whos Next

Thoughtful, ongoing planning for succession is a must for long-term business success and sustainability, so start now. Develop a clear plan about the succession of senior leader positions, including who will be next, when the transition will take place, and how that successor will be groomed to make the move smoother. The more planning you do now, the better the future will befor you and your family business.

Lois Lang is a speaker and consultant with Evolve Partner Group LLC where she helps organizations become high-performance workplaces. She works with clients on management succession readiness, organizational/team strengthening, executive coaching, executive compensation design, wage studies and mediated conflict resolution. For more information, call 209.952.1143; e-mail [email protected] ; visit www.evolvepartnergroup.com .

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