Succession Planning Helps You Sleep at Night
It is a mistake many make. We get so focused on building and running a business that we forget we won’t live forever. We also don’t seem to realize that we may like to buy into that retirement community with its superb golf course or spend more time with the family before we depart. And this forgetfulness has a direct impact on the business.
While it’s terrible for a salon if the owner suddenly isn’t around to pay employees their commission or even open the shop, imagine it on a greater scale, if that company employs 80 stylists or manages hundreds of franchisees?
For any management team with these levels of responsibility to suddenly find one of its essential members suddenly absent for months or even for good has far-reaching consequences for thousands of people.
There is another side of the coin – equally destabilizing – where the owner or owners decide they’ve had enough; that the golf course is beckoning, and without warning, they sell. Gone is the vision; gone is the heart and soul of the business. Even if the owner has no intention of doing so, the mere fact of its possibility can undermine a business and breed insecurity.
Succession planning is essential for the stability and security of the business, to ensure you attract and retain the right people and that they know how the business will function should catastrophe hit.
It’s a lesson I learned the dramatic way. I’d been doing my job for more than 20 years and I thrived on the daily challenges. I didn’t, and still don’t, want to retire into obscurity. But in 2004 I was diagnosed with cancer. All of sudden I had to envision a Great Clips without my hand at the helm. Or without my brother Ray’s vision.
It took several years, but by the end we had designed a strong succession plan that focused on developing key people and reassuring our franchisees. Ray has made it quite clear that through careful decisions and planning, he has secured his family so they will not be forced to put Great Clips up for sale to pay off an unforeseen tax bill or similar. When he steps away permanently from the business, Great Clips will remain under the current family ownership and there will be no asset-stripping of any kind.
I moved out of the president role to become chief executive officer, handing over the presidential reins to a very safe pair of hands. We knew Charlie Simpson would not hold the post for many years, but he was perfect for that transitional role. The structure of the senior management team was extended and strengthened, identifying clear responsibilities for some and clarifying career development strategies for other. Great Clips moved from being family-run to family-owned, with a transparent, structured management hierarchy. Our company is now secure and the culture entrenched. And although we are still very much part of it, Great Clips can and will continue once Ray and I choose to step away.