Scotland is renowned for producing some of the best food and drinks products in the world – whisky, salmon and haggis, to name a few. Perhaps unsurprising then that in the summer of last year Richard Lochhead MSP, then the Cabinet Secretary for Environment, Food and Rural Affairs, announced that Scottish food exports had surpassed the £1.1 billion mark for the first time.
The sector may be flourishing, but businesses need to take note – without building in contingency plans for the future leadership of your company, you risk a lot of heartache. What happens when the existing leaders decide they’ve had enough? Who takes up the reins when the person at the top retires? Is there a fresh face waiting in the wings?
Succession planning for businesses is a crucial part of their long-term survival. By ‘succession planning’ we mean the future make-up of your business, including management and ownership. Planning ahead and creating business plans is a step towards guaranteeing your sustainability.
I have seen many examples of succession planning across many sectors, and done well it enables companies to not only grow but thrive. This experience suggests that there are five active ingredients, no pun, to succession planning to which food and drinks companies should pay attention:
Know the retirement plans of your senior management team
Identifying the timeframe for transitioning the management and possibly also the ownership of the business is an obvious starting point. Questioning the senior team as to their retirement plans is not necessarily a comfortable conversation, whether that is through a misunderstanding of age discrimination laws, or uncertainty of whose job it is to ask the question. It may therefore fall to the current leadership to proactively manage succession plans based around their own plans to leave the company.
Identify future leaders
Assess the individual attributes and capabilities of current employees and identify the skills that need to be developed. Invest in the development of those individuals with potential and allow them time to gain the necessary knowledge – whether that entails gaining a professional qualification or overall business experience. Ideally, the future leadership team will provide the business with a variety of skills and perspectives. The new senior management team must have a shared vision of the company’s future and commitment to it.
Internal vs external recruitment
Recruiting from outside your own business may have its benefits. It can provide the business with a fresh approach and new ideas. It can also help avoid complacency and disengagement among staff who may view the existence of an “heir-in-waiting” as an obstacle to their own career goals and aspirations.
For many family businesses however, the dream is often to pass the business to successive generations and there may be practical and financial reasons for doing so. Some organisations require future leaders to “grow up” in the business, perhaps gaining experience in several different departments to ensure a deep understanding of it at operational as well as managerial level. Other businesses encourage successors to spend time working in other businesses or to gain professional expertise so they have a wider set of skills to offer.
Providing time for the future leaders in your business to work elsewhere could therefore benefit your overall succession plan.
Attracting and retaining future leaders
Getting the right pay and reward models in place are always vital in attracting and retaining talent; however succession planning can often require the individuals to have a personal stake in the performance and future of the business. Share options, long-term incentive plans, and properly designed bonus plans can help “lock in” key individuals.
Identify a back-up plan
No business should treat a “people plan” as set in stone because, as is often said, people change. The successor may decline the role; personal circumstances may unexpectedly change, for example through illness or family relocation; and key talent will always be susceptible to better offers from competitors, especially Gen-Ys and Millennials.
The best succession plans are usually modelled with the organisation’s business plan at its core and are shaped by someone who deeply understands and cares about the business, its vision and future goals.
While Scotland’s food and drinks industry may be flourishing, failure to adequately plan for the future could lead to a tumultuous transition between the old leadership and the new. Without proper succession planning, you run the risk of jeopardising the future potential of your business. Get succession planning right, and your business can continue to prosper for years to come.
For more information on succession planning contact Ann Frances Cooney on 0141 574 2312 or email AFCooney@hbjgateley.com