By Whitney Johnson
Driven by discovery.
This phrase sounds magical—evoking images of explorers like Columbus or Lewis and Clark. It seems even more magical when you consider one of the key attributes of a successful executive is curiosity, and that 70 percent of all successful new businesses end up with a strategy different than the one initially pursued. Groupon, for example, started out as an activism platform bringing people together to fundraise for a cause or to boycott retailers (ironic!) while Netflix, the Emmy-winning content company, started as a door-to-door DVD rental service.
But there’s a rub.
Discovery implies the unknown and most of us seem to prefer the safe harbor of the known–even when the known isn’t all that great. So, here’s a hack for putting some structure around navigating the unknown based on theory of discovery-driven planning of Rita Gunther-McGrath and Ian McMillan.
1. Create a reverse income statement. If you are launching a new company, rather than forecasting how much revenue you will generate and what your costs will be and then solving for the profit, you build the income statement in reverse. You decide on your required income, and then solve for how much revenue will deliver those profits, and how much cost can be allowed. When it comes to personal disruption, the question you ask is: To achieve my baseline level of happiness, what do I need to accomplish and what am I willing to give up in order to make this happen?
2. Calculate the cost. With this step, you estimate what the cost will be to produce, sell, and deliver a product or service to a customer. Combined, these are the allowable costs that permit the business model to hold together. As an individual, the question is what kind of time, expertise, money, and buy-in will you need to make your plan operational?
3. Compile an assumption checklist. This checklist allows you to flag and discuss each assumption as the venture unfolds. For example, what assumptions are you making about how much you will sell and at what price? As an individual, if you decide you want to earn $300,000 a year consulting, and last year you earned $270,000 consulting, then conventional planning works. If you’ve never consulted, then you’d want to think about the assumptions behind your ability to earn that $300,000. How many clients will you need? How many hours per day will you need to bill, and at what price point? Do you enjoy the work, and will it be emotionally satisfying?
4. Prepare a milestone chart. This chart specifies which assumptions need to be tested and what you are going to learn by each milestone. In discovery-driven planning, learning is the essential unit of progress, so a course correction isn’t equivalent to failure, as it would be in conventional planning. Rather, it’s an opportunity to recalibrate so you achieve your goals more quickly.
One of the key attributes ascribed to disruptors is that they play where no one else is playing. As a trailblazer, even though you may have a goal or purpose, your path to that objective is yet to be marked.
Being driven by discovery can be scary and lonely, and you will undoubtedly end up in places you haven’t anticipated. But, like Lewis and Clark, you have a plan: to discover and conquer territory.
About the Author
Whitney Johnson is an investor, speaker, author, and leading thinker on driving innovation through personal disruption. Her new book Disrupt Yourself, will be released on October 6, 2015. To learn more, visit http://whitneyjohnson.com/disrupt-yourself.
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“In the end, all business operations can be reduced to three words: people, product and profits. Unless you’ve got a good team, you can’t do much with the other two.”
Fidel was assigned to manage the succession planning in his company. Little had been done and he needed to identify key management positions and ideal replacement personnel within the ranks.
In the past he’d seen people promoted who didn’t succeed even though they had the proper training and skill sets. Fidel felt there was a key missing ingredient.
He turned to personality assessments. He looked at Myers-Briggs, the Color Code, Fascination, and other methods to understand the way personality influenced success.
Fidel understood that personality type was only part of the equation in management succession planning, but it was still important. “The company needs all of the personality types to function optimally,” Fidel said. “I realized part of my job was to create an atmosphere of respect for each personality type, so they felt free to bring their strengths to the table.”
- Detail oriented personalities. Some people naturally attend to the details. They make sure the reports are done on time, they meet deadlines, and assist others at being responsible and timely. “I looked at the jobs that required this kind of close attention to detail,” Fidel said. “Then I made sure the person we put in our succession planning program had those qualities.”
- Team building personalities. “There are some people that are natural team builders,” Fidel said. They are good at creating enthusiasm, gathering consensus, and helping the team get along. Fidel made sure these personality types were matched with the jobs that especially needed that group leadership. He recognized, however, that this personality type would not excel at the detailed follow-through that might be needed.
- Analyzing and processing personalities. Some people naturally follow critical thinking skills. They work well in positions that require analyzing information. They are gifted in sorting through massive information and understanding that it means and how to use it to their advantage.
- Think-outside-the box personalities. These intuitive thinkers are great for getting projects started. They are creative, inventive and vital for brainstorming. Fidel understood they should not be placed in management succession for a position calling for analyzing and processing. They would serve the company best in places where their creative thinking was welcomed and essential.
- The excellent personality. Some people just want the best—for themselves and their company. Excellent is barely good enough. They are effective at driving others to be the best. Fidel wanted this personality for succession planning for top talent that encourages the company forward.
- Nurturing personalities. When people know others care for them they respond better and perform better. They can be more effective sales people. They can see a need and fill it. In difficult situations, the nurturing personality can keep things running smoothly. Fidel assessed the key jobs that needed someone who could be supportive under pressure. Then he evaluated potential successors for these attributes.
“People looked at me a little strangely, when I first required them to take these personality assessments,” Fidel said. “I even got a little push back from HR when I incorporated personality types into the management succession planning. But it’s worked out beautifully.”
In the three instances where Fidel’s chosen successor moved into the new job, they have performed exceptionally well. “I feel vindicated,” Fidel said. “It’s doing everything I hoped it would.”
Do you have concerns about your company’s management succession planning? Contact Joel and he can help you with this and other options to insure you have key players in place when you need them.
Talkback: How does your company work its succession planning? What are key factors to consider?
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“Our goals can only be reached through the vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”
Client Ron asks: Our company has got to get serious about a planning program for succession. We talk about it all the time, but only in some kind of informal, conversational way. “Oh, Janet would be a great comptroller if we could get her into a couple of training programs.” But there’s nothing in writing and no formal plan with benchmarks and milestones. I’m going to take on this challenge personally. But how do I even get started?
Coach Joel answers: Unfortunately, many companies never even think about a succession planning program until they are faced with some kind of crisis or emergency. Someone becomes ill or gets recruited by a competitor and suddenly there’s a huge hole in the organization chart and no one is available to fill it. You’re smart to shed some daylight on this issue. Here are three action steps I think you should take as soon as possible to tackle succession planning in your organization:
- Create individual development plans
- Start an internship program
- Train high potentials with job rotation
1. Create individual development plans. Virtually every employee in your company should have a written career plan. This plan should include his or her core competencies, career goals, and what training programs are needed in order to get him from where he is now to where he wants to go. Be sure to include a time frame for each development activity. Work with each person one on one, and let them develop their own plan with your guidance, rather than developing the plan yourself and dictating to them what’s to be done. Be sure they know the plan can be modified if situations or goals change.
2. Start an internship program. An internship program is an important component of succession program planning. I’m talking here about a special kind of internship, a formal growth structure for employees on the move, not an unpaid summer job for high school or college students. Let’s say, for example, that Kate, who is currently an IT supervisor, has expressed an interest in learning more about marketing. Kate can begin to spend a small percentage of her time in marketing, doing real work, such as a special project or a real problem solve. Kate should have a mentor who will support and critique her. At the same time she should be given opportunities to interact with senior marketing staff during meetings and trainings. Socializing with marketing staff outside the workplace would also help her feel comfortable and become more visible.
3. Train high potentials with job rotation. Job rotations are designed to give rising stars wide exposure to the big company picture by experiencing all phases of the company’s business. Don’t confuse job rotation with cross training, which usually takes place among employees within a department rather than throughout the company. As an important piece of your succession planning, you’ll want to set this up so that each program participant spends time assuming duties and getting hands-on experience in every department. For example, let’s say you’ve targeted Jeffrey as a potential future CFO. As a final phase in his growth plan, he might spend an entire year devoting 25% or more of his time to projects in HR, marketing, and production. Think of job rotation as an investment in leadership development that will ensure that promising young employees gain the experience they need to understand all aspects of the business.
When you set up this kind of structure, you’re doing two things. First, you’re letting your future leaders know you have confidence in them. You’re giving them an opportunity to chart their own course to a successful future. At the same time, you’re giving them a huge responsibility to rise to the occasion by devoting hard work and commitment to their own futures. Most, if not all, will rise to the occasion and you’ll sleep better at night, knowing that your company has the right people in place who can step up to the plate when the occasion demands it.
How’s your succession plan looking? Contact Joel today for some ideas you can use to whip it into shape.
Talkback: Do you have some succession planning tools that are working for you? Share your successes here.
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“The longer you’re not taking action the more money you’re losing.”
Kimberly has been running her info-marketing business for 15 years now. She’s supported her family and saved a nice nest-egg. A scary bout with a heart problem sent Kimberly scurrying to develop a succession plan.
“I realized no one even knew my passwords. If I died, all my information would be locked up on my computer!” Kimberly said. “Entrepreneur succession planning for me would be a roadmap for my family and heirs to follow if I became disabled or died. And a plan for me when I get to thinking about retirement.”
Shared corporate knowledge.
First Kimberly took time to write down much of what was only in her mind. As the entrepreneur and creator of her business, so much was intuition and her own personal experience.
“I gathered together asset statements, bank accounts, partners, vendors, and all their contact information.”
She listed debts, repayment schedules, and plans for faster payoffs if needed. She made a folder and put life insurance papers, incorporation paperwork, and trust documents there.
Entrepreneur Succession Planning
“What would happen to my business if I couldn’t run it? Who could? What did they need to know?” Kimberly asked the tough questions. “I really didn’t want to think about all this. After all, I’d been healthy up to now. But I realized I wasn’t invincible.”
Fortunately Kimberly had an older child who was at college, but had shown interest in the business. “Because much of the work is online, he could do some things from college.”
Kimberly was surprised at what her son, Tim, knew about the business… and what he didn’t know. She set in place a plan to get Tim up to speed on every part of the business.
She also started working with her part-time employee, Lisa, to get her trained in every aspect of her business. “I wanted a back-up person who could take over in a pinch,” Kimberly said.
The Inheritance Plan
Even though Tim might take over the running of the business, Kimberly wanted her other two children to have their share of the business.
She called a family meeting to discuss who wanted to be involved in the business and how to divide the assets of her company.
As an entrepreneur, she’d never even had the value of her company assessed. “I had a figure in my mind, but the appraisal came in much higher,” Kimberly said. The other two children wanted the money but not the headaches of the work.
For Kimberly, the best solution was to create a company with shares. Each family member would inherit shares of the company. Tim would receive a salary and the shareholders a distribution.
This would allow Tim the chance to buy out his siblings over time if he wanted.
Feeling More Secure
“I never thought I’d be grateful for a heart attack,” Kimberly said. “But now I feel so much more secure and in control of the future of my company.”
Entrepreneur succession planning may look different than succession plans of other kinds of businesses. But it’s just as essential.
With her business organized and replacements in the wings, Kimberly feels more comfortable about the future. “It’s done,” she says. “Now I can focus on what I love— helping people succeed using my great products.”
If you’re an entrepreneur or solo-preneur who wants the confidence that comes from an effective succession plan, contact Joel for help.
Talkback: Have you created a succession plan for your start-up business? How did you find “replacements” for your key people?
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“If you plan on being anything less than you are capable of being, you will probably be unhappy all the days of your life.”
~ Abraham Maslow ~
Client Sylvia Asks: I want to get promoted. I even see the job I’d like to get. But I don’t know how to position myself so that I’ll be the natural choice for that promotion.
Coach Joel Answers: Sylvia, almost every company has a succession planning model in place. They identify the skills needed for each job. Then they look at potential employees and evaluate them based on those essential skills.
When you understand how the succession planning model works, you can take advantage of that knowledge to help groom yourself for the next level.
1. Understand the demands of the job you want. You can look at the job and recognize some of the skills and competencies needed. Write them down. Look at what the current job holder has to do.
List his duties. What kinds of responsibilities does the job have? Next list the skills needed to do the job. Will you need great communication skills? Good decision making skills? Will you need to build a team, work in customer care, arbitrate, or give directions?
You do not have to create this list all by yourself. It is likely that the company already has a list in their succession planning materials. Discuss this with your supervisor or with HR to see what qualities they require for this job. You might do this at your annual review or you can request a time to talk to your boss about your career advancement aspirations.
2. Evaluate where you are now and where you need to be. Make a list of your skills and qualifications. Review your past jobs and look at the qualities you exhibited there.
Now match them to the list of skills needed for your ideal job. Where do you match up? Where do you come short?
Again, you will likely want to review this with your boss. You may be surprised to find that she does not see in you all the qualifications you see in yourself. She may also recognize competencies in you that you have not considered.
As you share with her your goals, see if you can get buy-in from her to support you in your aspirations for this job. It may be that she will add you to the organization’s succession planning model for that next position.
Even if that does not formally happen, you can still take the organization’s succession planning information to plot your own career advancement goals.
3. Obtain the needed competencies and skill sets. Now that you have the two lists, work to make them match. Fill in the gaps to make you the ideal candidate for the job.
You’re a step ahead because your boss knows your goals. You can study, get coaching, and join professional organizations on your own. But you’ll need assistance from your organization to cross train, find a mentor, or be placed on committees, teams, and task forces that will give you the skills you need.
By following the same plan the company does as they look at succession planning, you model your career advancement on this information as well. When your skills match their own standards for your dream job, you will become the natural choice to step into that position.
To define your personal succession plan and claim your next step up, contact Joel.
Talkback: Have you discussed your next step with your boss? How has the idea of succession planning helped you focus on the skills you must first acquire?
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