Succession Planning: Who’ll Be the Next in Line?
Retirement can sneak up on you. One day you’re spending hours at the helm of your dealership, making a bevy of leadership decisions. The next day you’re eyeing golfing engagements, volunteer opportunities and part-time consulting gigs.
Are you taking the right steps now to prepare for the transition to a new leader? If not, your business could be left in a proverbial lurch.
The early bird wins
The best advice is to start planning for the transition early. Many consider five years before retirement an ideal time to draw up an outline of who might succeed you and how it all will take place. If you’ve already chosen a successor, getting a jump start on your plan will allow ample time to train him or her.
If you haven’t chosen a successor, you’ll first need to think about whether your successor will be family or nonfamily. Do you have a son or daughter poised to take the reins, or will you hand them over to a key manager — or look to the outside? Maybe you have a business partner who’s interested, and able, to take on the responsibilities of leadership alone.
It’s all about qualifications
When evaluating a successor candidate’s qualifications, look for a well-rounded business education and senior management experience. Your candidate — even if he or she is a family member — should be able to present a strong work track record.
Specifically, this person’s abilities should match up with the complexity of your dealership’s operations. If, for instance, your kid sister has great marketing and sales skills, but isn’t the least interested in general business or finance, choosing her could be a bad fit.
If you’re looking internally, size up your strongest players in senior management. Ideally, the “leader-to-be” will have hands-on work experience in each functional area of your dealership.
Beyond judging a candidate’s skills, assess his or her personal characteristics, such as having an open mind that can keep pace with industry changes and consumer demands. Other desirable qualities include being able to share and delegate responsibilities while accepting responsibility for decisions and actions. Also seek someone who’ll be a good listener for employees and other managers at your store.
In the event you don’t have a qualified family or internal candidate, you’ll need to look externally. An executive search firm can help you locate and screen qualified candidates. Your trade association or Dealer 20 group also may be able to assist.
Training should be wide-ranging
During the training process, you’ll want to develop your successor’s know-how in a full range of dealer responsibilities across departments, including accounting and finance, sales and marketing, office administration and operations, human resources, and parts and service. Your replacement also should become conversant in manufacturer communications, customer relations and information technology. In the case of a family member, put extra effort into staying objective as you train him or her to run the show.
Last, remember to define your role in the transition. Your options are vast, from passing on daily management responsibilities while retaining overall control to handing over not only all control but, ultimately, ownership. These decisions are multifaceted and depend on many strategic, economic and personal factors.
During training, put your pride aside. Your successor will likely replace some of the ways you did business with methods and procedures he or she believes will work better or be more up to date. Don’t let an injured ego let you lose sight of your importance as a valued advisor.
Involve the village
The succession process isn’t executed by two people alone. You’ll want the support of the entire dealership as well as external individuals who’re important to your business’s health and stability. You might start with your attorney and financial advisor, but eventually you’ll want to involve everyone who’ll be affected by your succession decisions — including family members and employees.