Why Should SMBs Have a Succession Plan

Why Should SMBs Have a Succession Plan

Why Should SMBs Have a Succession Plan

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The succession planning process entails finding candidates to succeed the CEO and other top executive roles. Picking successors, and managing the transfer to minimize the impact on a company. Above all, it’s about ensuring a brighter future for the company and its people under new leadership that will have the required skills and experience to propel the company forward.

Careful planning can ensure the continuity of a company as it passes through multiple generations. A well-prepared succession plan may also support a company in achieving the best possible exit.

It is challenging to be an expert on a process you’ll probably only do once. That’s why receiving the appropriate guidance from a reputable source may help you get your succession planning process right the first time.

Can’t imagine how your company would function without you?

Entrepreneurs — the owner-managers — are the lifeblood of privately held companies in the small to middle market. These remarkable individuals are the ones who have developed their companies, withstood years of recession and uncertainty, and emerged victorious, not just surviving but prospering. They can do so because of:

· The dedication to their company is unwavering.

· Their comprehensive understanding of the company’s operations and market.

But what happens if that person is removed from the equation? What happens to the company’s value?

As they explore the market for prospects, many company buyers ask themselves these questions. It’s for this reason that, for company owners contemplating an exit or retirement, it’s crucial to begin the complicated, perplexing, and ultimately humbling work of figuring out how to pass on the information and expertise needed to manage their company successfully to another party.

Once a company owner overcomes their apprehension about handing over control, there are several practical steps they can take to jumpstart the succession planning process, protect their company’s future, and reassure potential buyers.

Though succession planning is a time-consuming process, there are few ways it can benefit your company. Let’s look at the advantages of succession planning.

Become Disaster Proof

You pay for insurance to safeguard your physical company from natural disasters such as hurricanes, floods, and fires. To protect the company from theft, you deploy security measures. You also back up data to an off-site location to protect your company’s confidential information.

Most companies have a backup contingency in place for mostly everything, except for key executive members. This is a mistake.

Usually, company owners become so occupied in their company’s day-to-day operations that they overlook succession planning. Sometimes these leaders believe that they are too young to suffer from any significant illness. Alternatively, they may ignore the possibility that a key person (or several) will be tempted away by another organization in need of their expertise and prepared to pay top cash for them. Any of these conditions could make a company particularly vulnerable.

Having a plan in place for succession is like having replacement insurance in case your building catches fire. Albeit a fire would result in a painful loss, you can recover from it. Having a similar mindset about succession will make your company disaster proof.

Know Your People Better

Formal succession planning requires that your company:

· Determine which positions are most important to the company’s future development. Not all these jobs may be in the C-suite.

· Identify internal applicants who have the values, talents, and motivation to fill those important positions.

· Inquire about the interests and career plans of possible recruits.

These key steps in succession planning result in several advantages. A thorough examination of your org chart can assist your leadership in better understanding potential risks and can create a feeling of urgency to cross-train essential workers in certain positions.

“The better you know your people, the most likely you can design a success plan around them.”

Better Training and Development

As you identify capability gaps, you can begin to groom Sally, Bob, Bruce, and Jen for eventual succession once your organization has determined that they are interested in advancing into senior positions.

Coaching, mentoring, job shadowing, or a progressive rise in more advanced tasks may all be part of an employee’s professional growth. Other jobs may even require the individual to return to school to obtain extra training or certification.

If you identify potential successors early, it will give them time to attain the necessary skills and experience needed to succeed in senior positions. This also shows that you are willing to invest in employee’s personal development along with the company’s development.

More Eyes Focused on Success

Your company has a chance to receive possibly its best instrument for growth and prosper once your top succession candidates have been cultivated. This occurs when junior management sits down with senior executives to discuss why they’re doing things the way they are.

Explaining the status quo is a basic method that can disclose flaws in processes and procedures, sales possibilities, and opportunities for change. This natural process allows your company to keep an extra set of eyes on its leadership jobs and fosters criticism of outdated or inefficient corporate conventions.

Protect Brand Identity

You must have heard about externally hired CEOs who join an organization with great hype, but they end up failing within a short time. Unfortunately, such type of poor hiring impacts the company’s reputation and hamper its long-term success.

This frequently occurs when the new CEO is unfamiliar with the company’s underlying principles and mission because they haven’t “grown up” with it. They pull the corporation away from its core brand because they want to put their stamp on it or don’t understand the client’s wants.

Succession planning helps to future-proof your company, by ensuring that the culture lives on, and that the institutional knowledge continues to prosper.

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Why Executives Need Coaches

Why Executives Need Coaches

Why Executives Need Coaches

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Executives are like athletes. They are under constant pressure to perform daily. Like with athletes, coaching is the most effective approach to ensure that leaders perform at their best.

Workplace coaching is a rising field with a growing corpus of research to back it up. 

What is workplace coaching? 

How does it work? 

How can coaching be utilized to help companies grow?

Coaching in the Workplace

Workplace coaching is a professional assistance relationship centered on the student’s objectives. It is based on two parties’ reciprocal acts.

The coach responds to information about the executive’s requirements, while the student receives assistance from the coach in the form of active listening, intelligent questioning, or tangible instruction.

The student’s potential is unlocked through workplace coaching. 

Coaching is a facilitative method to learning and development in which the coach facilitates future self-directed learning and development.

Importance of Coaching

Leaders can deal with the unknown with the help of coaching. The workplace is a fast-paced atmosphere with high turnover and volatile market conditions. 

“The beauty of coaching is that to be effective, leaders don’t need to know everything. Instead, they need to understand how to empower people.”

A command and control leadership style might be contrasted with coaching. A command-and-control leader is highly directive, makes decisions without consulting others, and celebrates success while punishing failure.

In some cases, such as when the work at hand is well defined or the organization is small enough to allow for micromanagement, command and control can be perceived as beneficial. However, most tasks are uncertain, teams are live organism, and people aren’t assets to be directed…. they are human beings, so a different more sustainable method is required.

An executive might use coaching to elicit the strengths and knowledge of people, allowing them to concentrate on the larger picture, avoid micromanagement, and empower employees to demonstrate their competence.

Defining Your Company’s Coaching Requirements

If you want to hire a coach, there are a few things you can do to figure out what your company’s coaching needs are.

To begin, you can hire a consultant that specializes in obtaining data in organizations using surveys, assessments, and interviews.

There’s no better way to figure out your organization’s needs than to talk to the people who work there. If your company’s culture permits employees to give candid criticism, hiring a consultant is not necessary. In this scenario, you can interview a sample of your employees and ask them about the skills and resources they believe they need to accomplish their jobs well.

It may be time to hire a consultant if you believe your employees are not giving you honest feedback or if you are stuck.

Advantages of Having a Coach

Personal Advantages

The personal advantages of coaching are as diverse as the people engaged. Numerous clients indicate that coaching has had a significant impact on their jobs and lives by enabling them to:

  • Set goals and take steps toward obtaining them.
  • Increase self-sufficiency.
  • Gain a higher level of job and life satisfaction
  • Make a bigger contribution to the team and the organization.
  • Assume greater ownership and responsibility for actions and commitments.
  • Collaboration makes it easier and more productive to work with others.
  • Improve communication skills.

Organizational Benefits

The benefits to an organization who engages coaches for its people, is improved engagement and ultimately more authenticity and intimacy. You can expect the following results:

  • Aids in the identification of organizational and individual strengths as well as growth potential.
  • Encourages people to succeed by motivating and empowering them.
  • Demonstrates a commitment to emotional intelligence development inside the organization.
  • Individuals are empowered and encouraged to take responsibility, which leads to increased employee and staff engagement and improved individual performance.
  • Assists in the identification and development of high-potential workers.

Your company will benefit from workplace coaching to establish the groundwork for positive cultural change.

It’s About Empowerment

Coaching has numerous advantages, including the ability to strengthen business ethos, rejuvenate workplace spirit, minimize friction, and even increase sales.

It’s a method of interacting with clients or employees to maximize their potential and empower them to deal with difficulties.

As business grows and becomes more complex and uncertain, coaching becomes a way to maintain momentum. Rather than just relying on their competence in a specific industry, executives working with coaches can fine tune their ability to evoke creativity and innovation from people.

A coach can help identify blinders a leader may have that impacts how they come across in the organization by pinpointing behaviors a leader needs to work on.

“The more executives learn to become better at relationships with people, the more empowered the organization.”

We all have blinders that don’t serve us as executives, or the people in our care. Having an executive coach is key to removing them and thrive as individuals and organizations.

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How to Leverage KPIs to Grow Your Business

How to Leverage KPIs to Grow Your Business

How to Leverage KPIs to Grow Your Business

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All businesses aim to create a successful product or service that will sell and meet customer expectations. This is possible when a company works diligently to validate a need in the market. However, many companies have difficulty making progress because they do not have well established KPIs to track.

Important decisions must be made to grow a business. Decisions around investments, finance, marketing, human resources, and business operations, among others. 

Business metrics known as Key Performance Indicators (KPIs), help in the launch of new services and products, as well as marketing campaigns, sales, and can aid in future planning. 

Numerous business metrics can be measured, but the indicators you choose must depend on your company’s culture, industry, and goals.

How to Use KPI Metrics

Business metrics are quantitative measures used to track, monitor, and analyze the success or failure of a business operation. It aids in the efficient decision-making process for corporate management. 

Customers, managers, business owners, investors, and vendors are all business stakeholders who are impacted by business metrics.

“KPI business metrics provide you with a pulse on the health of the business.”

Each department of a company keeps track of, monitors, and analyses its performance and essential indicators. 

The sales department handles metrics, such as sales volume, sales calls close ratios, lead to deal conversion ratios, and so on. 

While marketing handles engagement percentages, campaign costs, website traffic to lead gen conversion ratios, among other things.

Many companies include their favorite business metrics in their mission statements, and some even include them in their day-to-day operations.

Six Steps to Increase the Value of Metrics

You can’t get any information from measurements if you don’t know what to measure. Worse, if you measure the wrong things, your conclusions could lead you down a road that hurts your company’s performance. 

What’s the trick to avoiding both scenarios? Verifying that the performance measurements you are tracking are relevant.

That is, of course, easier said than done. Internally and internationally, well-designed analytics solutions can measure every facet of your organization. However, before even considering an implementation, they must be based on the correct metric. 

Here are six simple steps you can take to improve the impact of your analytics.

1) Strategy First

First and foremost, it’s essential to avoid one of the most common business intelligence blunders: starting the metrics defining process from the wrong end. Everything you do and assess should ultimately be tied to a larger corporate plan.

If you start with performance measurements without considering this technique, you risk wasting time and resources on KPIs unrelated to your desired outcome. 

Instead, use your strategic goals to create quantifiable targets that can be implemented across the board. Only then should you identify performance measures that will aid in achieving these goals, and by consequence, the larger strategy.

2) Interconnected KPIs

Another common blunder when setting KPIs is doing so in isolation. For example, sales, click-through rates, common trends, and conversions are all independent performance measures in social media. However, just because they’re independent shouldn’t imply they can’t be tracked without being linked.

Your KPIs should be horizontally integrated, just as they should be linked to broader strategic goals. In layman’s terms, this implies being able to see how changing one metric effect another. 

The only way to ensure that measurements become meaningful in evaluating your work and making decisions is to identify metrics that create meaning together.

3) Focus On the Future

When you construct your metrics, ask yourself a fundamental question: are you only measuring past success, or are the indicators you’re focusing on also forecasting the future? 

Experienced analytics professionals may recognize this query to discover both lagging and leading indications.

Simply put, trailing indicators reflect uncomplicated outcomes. They are the result, informing you what happened but not why. On the other hand, leading indicators are concerned with desired outcomes and the events that lead to them.

Lagging indicators undoubtedly make up most of the data in your business intelligence solution right now. Naturally, we’d want it to be the other way around; leading indicators are much better at predicting future performance. 

You should reverse the script and focus your measurements on the future rather than just reporting on past results, this will make your metrics more useful.

4) Don’t Put Too Much Emphasis on Goals

Goals are fantastic. Leading indicators can assist you in establishing a goal for which everyone in the firm can strive.

Goals are a nightmare. They frequently generate issues because they constrain the scope of performance to the point where certain experts would go to any length (including unethical actions) to achieve them. Cooperation reduces as risks rises.

Both assertions are accurate, as any experienced manager understands.

So, where is the middle ground?

The idea is to identify a point of agreement. Set realistic expectations using your future-facing measures, but don’t become too reliant on them. 

Only by striking a balance can a company achieve long-term success, with measurements that improve overall performance.

5) Identify and Track Desired Outcomes

In the end, the issue of making your measurements more meaningful boils down to one basic question: which business outcomes should you prioritize? Most businesses fail to meet their strategic objectives because the objectives are not linked to the measurements.

Just as you should begin establishing these KPIs with your overall strategy in mind, you should also ensure that your business intelligence efforts maintain a solid link to the top. 

The only way to have an impact is to ensure that your business intelligence is integrated with all aspects of your business, both internal and external.

This involves deciding precisely what you want to achieve and then developing measurements to track your progress. After that, you can set benchmarks to assist you in tracking your progress toward your goal and strengthen the link between strategy, objectives, and performance indicators.

6) Give Internal Metrics External Context

Finally, it’s essential not to overlook your external surroundings. You may have observed that all the preceding processes and points were heavily reliant on internal KPIs. But do you know how they stack up against comparable data in the market?

External and internal leading indicators are the key, as Gartner’s James Laurence Richardson pointed out in a presentation on the same topic at Gartner’s 2017 Data and Analytics Summit.

“Only by connecting external market needs to internal capabilities can you build aspirational and practical measurements.”

To put it another way, these external factors can give you the context and benchmarks you need to track your progress over time. They enable responsible goal setting as well as an in-context assessment of your market position. Only an external consideration can make your business intelligence metrics genuinely meaningful.

Take Steps Towards More Meaningful Metrics

Analytics attempts are annoying at best and deceptive at worst if the correct metrics aren’t used. That’s why it’s necessary to uncover and define metrics that genuinely matter to your organization when you set up and build up your business intelligence operations.

To recap how to leverage KPIs to grow business:

  1. Start With Strategy
  2. Develop Interconnected KPIs
  3. Measure the Future
  4. Avoid over Committing to Goals
  5. Define and Track Your Desired End Results
  6. Link External Context to the Internal Metrics

Make no mistake, measurement is critical to success. Defining the right metrics to analyze and help you achieve your goals can make the difference between purposeful success or accidental failure.

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Why and How to Incentivize Employees Proactively

Why and How to Incentivize Employees Proactively

Why and How to Incentivize Employees Proactively

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Employee incentives come in many forms, but they all serve the same purpose. Incentives help you to drive your staff to go above and beyond the call of duty. It is essential to understand what motivates people in today’s competitive environment.

You may incentivize your employees’ behavior, activities, and overall productivity in a variety of ways. Knowing how your employees want to be rewarded for their performance is a precondition for creating an employee recognition program.

For their daily accomplishments, research reveals that 54% of employees prefer a spoken “thank you,” while 31% prefer a written “thank you.” Moreover, 47% of employees would like to be acknowledged for achievements with promotions, while 23% would prefer a pay raise.

The Benefits of Incentivizing Employees

The value of employee recognition has been analyzed numerous times. Typically, HR professionals in charge of employee appreciation programs track their outcomes to prove their value to the bosses. HR business partners frequently initiate employee incentive programs that provide targeted business outcomes.

Fortunately, there is a massive quantity of data available to persuade executives of the value of employee appreciation. It’s worth noting that 70% of companies with an employee recognition program link it to its values, while 59% incorporate it into their talent strategy.

Incentives Increase Motivation

Employee disengagement costs businesses in the United States $500 billion per year. Increased employee engagement will have a favorable impact not only on the bottom-line, but on other parts of the work experience.

Employee engagement has been a hot topic among HR experts for decades, and several companies have demonstrated the benefits of highly engaged workplaces. You can read about how a recognition and rewards software platform called JobPts has helped organizations raise employee engagement by as much as 175%.

Incentives Boost Retention

To keep employees in today’s competitive market, businesses must become great employers and best places to work in order to compete for the best talent. That does not simply imply increased monetary compensation for employees.

“Becoming a great place to work includes cultivating a work environment where your employees will want to stay and thrive.”

According to a study, 68% of HR professionals believe their program positively impacts employee retention. Employee incentives might save you up to nine months’ worth of salary if you end up having to replace an employee who resigned due to lack of proper incentives or recognition in your organization.

5 Ways to Retain Employees Through Incentives

Pay Salaries and Bonuses

Companies that pay a mix of salary and incentives have the highest employee morale and productivity. Employees are compensated for completing all tasks assigned to them, and they are paid regularly. The incentive (which may be a commission for salespeople or a bonus for others) encourages them to accomplish and surpass their objectives, allowing them to earn more money.

Employees should be paid the salary component of their pay on a monthly or bi-weekly basis. Employees should be paid the incentive part of their pay as quickly as possible after achieving their objectives. As a result, quarterly incentive payments are often more motivating than annual payments. Monthly incentive payments are frequently the most effective.

Make the Incentive Easy

The incentive component of a strong pay plan should measure no more than two to four performance criteria, and all employees should be able to explain the plan in the time it takes to walk from your office building’s front door to your receptionist’s desk.

Set SMART Objectives

Specific, Measurable, Ambitious, Realistic, and Time-bound goals are called SMART goals.

· For salespeople, this involves setting monthly and annual income goals and goals for new account opening.

· Establish targets for the ratio of customer compliments to complaints and/or the number of customer complaints resolved on the first phone call for other customer contact personnel.

· Consider setting goals for personnel in accounts receivable based on the amount of overdue revenue they collect versus certain benchmarks.

· Consider setting goals based on the quantity of defect-free products you produce if you work in manufacturing.

While it’s acceptable to pay a portion of the reward based on the team’s overall performance, most of the incentives should be based on individual performance.

Keep up With Competitors

You should check what your competitors are paying every few years and change your compensation plan accordingly. You can do this informally by asking employees at other firms you interview about their payment plans, or you can do it more objectively by hiring an outside consulting firm to benchmark your plan against others and give you advice on how to improve it.

When you discover that your employees are no longer at parity with the market, adjust their compensation proactively. Don’t wait for them to ask. If they must ask you, it means they have already interviewed elsewhere and have discovered they are worth more than what you are paying. Be proactive with compensation, it will help with retention.

Offer Non-Monetary Incentives

Employees are motivated by several sources of recognition and rewards besides money. Consider organizing a yearly vacation to honor staff who have met specified objectives.

Company-sponsored excursions foster camaraderie and teamwork in addition to enhancing motivation.

Retention and performance can also be influenced by how you train, develop, and manage your staff. One of the finest methods to boost their motivation is to pay them as much as you realistically can be based on their performance.

“Boosting employee incentives can help an organization meet its goals. It shows employees that that they are significant to the organizations.”

With an increase in work fulfillment, employees are more joyful to go through their days at work and that naturally increase engagement.

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