What Do Your Successors Need in Order to be Successful?
What do your successors in your business need? According to the Carnegie Institute, 85% of your financial success has to do with your skills in what they refer to as human engineering. That’s emotional intelligence, empathy with other people, etc – also known as your people skills. In fact, I think you’ll find that your emotional intelligence contributes to your effectiveness in many areas of your life, not just your financials.
When it comes to succession, the research seems to always focus on professional development, technical skills, certifications and designations, and such. It doesn’t focus enough on personal development and people skills. There’s just too much effort and emphasis on the technical aspects of our businesses, and not nearly enough on the people-related aspects of our businesses, so when it comes to our successors, we don’t have good evaluation metrics. Too often, we use hours worked to prove that someone must be fanatically committed to the success of the business. But that doesn’t necessarily mean they are quality workers. Hours spent at work is a really flawed metric for whether people are good at, committed to, and successful in your business or not.
The other thing that technical emphasis usually disregards is a support network. Most young people in your business today don’t have much of a support network out of work. They don’t have any peers or they have very few peers with whom they can talk and share ideas and issues and challenges in the business, and try to find solutions and such.
So let’s talk about what your successors actually need.
Emotional Intelligence. This means understanding people, empathizing with people, sensing their needs, understanding your own needs and being self-aware, etc.
Self-development. They need to have constant constructive feedback through 360-degree instruments or executive coaching or things like that. They need feedback on themselves and how they can improve, not just technically, but as leaders in your business.
A peer network They need people they can talk to and share with – challenges, opportunities, ideas, innovations, all those things. Having a peer network gives them something that they could tap into for ideas, so they could bring them back to the senior leaders in the family business?
Training in communication, primarily on listening and negotiation. This impacts everything in business from deciding whether or not to give an employee a raise, to negotiating with a customer. There’s so many things in a small business, especially if they result in disagreement, that require some element of negotiation. That’s an important piece of the training.
Training in managerial finance. Not compliance finance, not putting the right number in the right box on a silly tax return, not making sure the balance sheet balances. You ought to have people to do that for you. But managerial finance is super important. They have to know which numbers are really important in their business, what metrics they need to really look at and focus on, what key performance indicators do they need to be looking at in their business to know that they’re on the right track or the wrong track.
Ultimately, what your successors need to learn is to think like businessmen and businesswomen. It’s not so much that they’re task doers or technicians in your business or they’re really good at IT. Those things are fine, but the people that are really going to run your business in the future, that are going to drive your future success, they need to be leaders, and the way they get to be leaders has a lot more to do with who they are as people than what they can do as technicians.