Turning employees into owners actually gives them the skills and information they need to think and act like entrepreneurs. These same entrepreneurs end up being the best people to take over the company when the owner is ready to retire. Harnessing the collective energy of all employees does not happen overnight, however. Creating an employee succession plan can take three to five years to develop, depending on the business owner’s priorities and the guidance he/she receives.
Many owners make the mistake of underestimating how much time this transition takes. Too often, they do not put any effort into a succession plan until it is too late. Time frame aside, turning employees into owners comes down to a shift in mindset that the value of the company is not in what it produces, but rather in its employees and the amazing things they can accomplish through collaboration. The following three-part strategy can help make this transition:
- Start having authentic conversations
This first step is often the hardest for owners accustomed to running the business. Owners
can start by having authentic conversations with employees about how they make knowledgeable decisions. This includes:
- What information do they watch?
- What is good?
- What keeps them up at night?
- How is information acquired and when is it time to act on it?
Some exercises that work to accomplish this task include:
- Corporate dashboard: This is a simple look at how the company is doing, without needing a master’s in business administration. It puts financial metrics in a form so everyone can understand and use.
- SWOT (strengths, weaknesses, opportunities, threats): The attitude, “When I want your opinion, I’ll ask for it,” will not build a team for the future. Having authentic conversations about the company’s strengths, weaknesses, opportunities, and threats allows current and future leaders to create a common vocabulary about the critical issues facing the business.
- Employee surveys: Business owners should ask their employees what matters to them or what concerns they may have. It is also good to know what is working and not working for them with respect to the company. Knowing these answers can reveal a lot about a company, as well as provide the opportunity for improvement.
- Listen to customers: Like the company’s employees, customers are a valuable resource and should be included in the transition process. This eliminates decisions based on the “I think” model to “I know” by focusing on true customer data.
Now it is time to start the strategic planning process. This is often done through a workshop away from the office. It is important to select candidates for this process on their willingness and ability to lead, not titles.
After selecting the team, start having authentic conversations and prioritize what matters most for the future of the company. Remember to let the employees lead these conversations. Owners at this point should be more like mediators and wise counsellors. This will be especially appealing to younger employees, or so-called millennials—and create new loyalty.
This stage is also an opportunity for the owner to test the candidates. Who has the will and the ability to lead and get things done?
