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Identifying and Training Successors

“How do you go about identifying and qualifying successors within your company, not only for the owners but also for those in key management positions as well?”

– Connie Costner, President Mathand Material Handling Systems, Woodstock, GA

Asked-Answered1Scott Hennie, President, Elite Supply Chain Solutions, Hudson, OH
This is an on-going conversation at the MHEDA Board Meetings and is identified as a “Critical Impact Factor” for the industry and association. It is important to identify and develop future leaders in our businesses. Too often, it is easy to keep things “Status Quo” when we are experiencing success and growth. When business and economy are contracting, we are focusing on cost management and survival and tend to take our eye off of long-term strategies.
Succession and development of team leaders needs to be part of an organization’s Mission and Vision. This should be a key component to your Strategic Plan. A couple of key points that we try to focus on:

• Develop and maintain a “S.E.A.R.C.H.” model for every key position in your organization (Skills, Experience, Attitude, Results, Cognitive Skills, Habits)
• Identify potential candidates for every role within your organization
• Discuss and understand those candidates’ goals and expectations – are they in line with yours?
• Create a development plan to provide the candidates the opportunity to develop into the role
• Don’t assume the person will be successful. If there is not a good fit, identify early and re-direct the candidate’s development. Don’t assume that a successful team-member will be a successful leader (Is your best Salesperson going to be a successful Sales Manager?)
• Don’t be afraid to go outside the organization if the right candidate doesn’t exist in your business
Jerry Weidmann, President Wisconsin Lift Truck Corp. Brookfield, WI
We have a formal process for succession planning for our entire staff. Our human resources department is responsible to coordinate our succession planning. A list is prepared on an annual basis identifying all employees that are over fifty-five years of age. Our management team is responsible to plan for the replacement of members of their staff. As an employee approaches retirement age, our managers are expected to identify, with assistance from human resources, the individual or individuals that may replace someone who is planning on retiring.

If the retiring individual is an existing staff member working in the department where the vacancy is anticipated, a development program is put in place to train the individual in areas of their future responsibility. By training the successor in advance they can be fully trained when they ascend to their new position.

We generally want to identify a successor six months to two years (depending on the position) before a retirement occurs. This allows the successor time to learn from the individual they will replace.

In the event that a successor is not on staff in the department where the retirement is taking place, we will post the position internally and advertise the position externally sufficiently in advance of the retirement to hire someone from another department, division or outside the company, with sufficient overlap with the retiring staff member to assure a smooth transition.

The actual process of identifying the correct person for a position is no different than the normal hiring process. The individual is interviewed, if appropriate a test is given to the applicant, and each applicant is evaluated for knowledge, skills, and capability to perform the job.

The challenge of replacing key positions in our organization is becoming more challenging. We have a significant number of key people that will be retiring in the next five to ten years. We are increasing our human resource staff commitment to make sure we are working ahead of the retirements of our key people.

Buddy Smith, CEO Carolina Material Handling Services, Inc. Columbia, SC
This is a question that our dealership has recently begun to look into. We have set up monthly meetings with our HR manager and senior managers with the sole purpose of discussing succession planning in our various departments. In these meetings, we seek to answer the following questions:

• In what areas are we vulnerable due to managerial turnover?
• In those areas, do we have someone ready to assume that position?
• If not, is there someone within our organization who has shown the competency to assume a bigger role?
• What training might be needed, should we identify a person internally as a candidate?
• If there is no one on staff that can be identified, where do we look externally and when do we begin?
We have found these meetings and discussions valuable in laying the groundwork for a good succession plan.
Ted Springer, President Springer Equipment, Birmingham, Alabama
Great question! Identifying and qualifying successors is a long term process. They often don’t always come from within your organization as much as we would like for that to happen. For us potential successors have been successful next level executive managers who have risen through the ranks throughout their career literally from entry level to EVP positions. It takes time for them to learn your specific corporate culture as well as the many nuances of our industry if they come from outside the lift truck business. For those that are promoted from within to key management positions over many years you are able to see how they reached their potential from work ethics, to their ability to deal with customers, co-workers, vendors and owners.

Whichever method you choose, either growing your own or hiring those that show great potential, It is important to remember that this is a long term process, takes years to get it right and is always a work in progress in your company!
Daryle Ogburn, President, Advanced Equipment Company Charlotte, North Carolina
Great Question. First thing I do is to observe our employees as they carry out their current assignments. I do this for several reasons; to observe their creative ability in defining and solving problems and providing excellent solutions for our customers, to observe their ability to both work independently and to work in cooperation with other team members, to observe how well they interact with customers and our suppliers, to observe who has the confidence to make their own decisions and who needs constant approval and who has ongoing interest in other parts of the business as observed by questions they ask, ideas for improvements they offer and request they make to be part of project teams apart from their main duties. After I identify candidates with leadership traits I then get them involved with networking and educational opportunities to see how they handle themselves and how they progress. Based on their success with this process I determine who has the leadership abilities to move up in our organization and take on more responsibility.
Doug Carson VP – Marketing & Sales, Fallsway Equipment Company, Akron, OH
Qualifying successors revolves primarily around an individual’s consistent willingness and ability to access business situations, take measured risks and make a decision that is best for the customer and the company. Those that rise to the top are the decisive people who then regularly execute their plans by building consensus across every discipline in the company using all available resources. These individuals also possess excellent communication skills – both written and verbal.
Bill Ryan, President LiftOne, Charlotte, NC
At our company we have a program we call succession planning. This program is designed to provide our employees with a direction or possible directions to help them develop their careers. It also furnishes the company with a roster of employees who are potential candidates to fill key positions in the future. It is a deliberate quarterly process tied to annual performance and development goals, monitored and administered by our Human Resources Dept. This program is delivered by and through our senior managers. Our aim is to have a potential replacement for each key position “in the works: within the company.

Mike Vaughan, CFO, Liftech Equipment Companies, Inc. East Syracuse, NY
Very common question being asked these days. I would prefer that the effort is described as “positioning” rather than “identifying” your company’s successors. Starting with the succession plan the business needs to start evaluating well ahead of your planned transition/retirement date. The succession plan needs to identify the strengths and weaknesses of your management talent not only after succession but also before to ensure that your organization is best prepared from and operational and financial standpoint to succeed. That analysis will determine if the business has candidates eligible to lead the business but also identify if you’ll need to bring in needed talent. If you find that you have internal talent the process of maturing that talent is a combination of escalating responsibility, in some cases training on the skills needed to be an effective CEO and mentoring. I would caution that not all have the DNA to run a business and that skill sets mastered in functional and management roles should not be assumed to transition to success as a CEO.
Al Boston, CEO, AK Material Handling Systems, Maple Grove, MN
The first requirement that we look for in identifying and qualifying a successor is a positive attitude. We know that we cannot train attitude, we can only support good attitude. Secondly, we look for the interest and excitement to get the assigned tasks done. If there is no passion in the work that they are doing, or a lack of trying to make the job work better they are probably “not move up people”. I know every organization needs worker bees to get the job done, but they are not material for key management positions.

Third, now that you have identified an entrepreneurial spirit, discuss with them about their vision and passion. If this matches the company’s vision, you would move to the next step,

Now would be the time to start mentorship, training, verifying, and more training. The person would now be ready to move up in the key management or successor position. Use care and caution in doing this process because if you do not have anywhere for this person to go within a reasonable time frame, you may have mentored this person for another organization.

At our company we have identified the “move up” people and provide what is necessary for their progression. It is critical to discuss the process and progression with the individuals so that they are engaged and do not become discouraged. It definitely helps if the company is growing.

Also keep in mind that key management positions that arise in a company may not match the existing skill set of the existing employees, in that case you will have to look outside.