The Challenge We Identified
When business owners are ready to back away from the day-to-day responsibilities of running their companies, many look to key employees as potential successors. However, without a complete assessment of skills, entrepreneurial attributes and overall fit for the new role, these internal promotions often fail. This is precisely what occurred for our client.
Within a year after the internal candidate was named president, company sales had declined significantly. This prompted the owner to reach out to Decision Associates to evaluate the president role and help re-set the company’s direction.
Our Approach To The Problem
Working closely with the business owner, Decision Associates assisted him in clarifying his goals, both for the company and himself. With these guideposts, our succession team then led him through a process to:
- Confirm the shortcomings of the underperforming president as well as the expectations and skills needed for the next leader
- Identify aspects of the business that needed to be different, including what success in the president role should look like
- Develop an approach for a compassionate conversation with the leadership team and underperforming president
With company goals set and leadership expectations established, our consultants then facilitated several critical exercises, including:
- Work sessions with the leadership team and potential next president to ensure they were prepared for the new leader
- How to best communicate the changes in company leadership
- What was going to be needed to ensure success
- Recruitment of a candidate who would be the best cultural fit to achieve operational excellence
- Development of a decision-making matrix to clarify roles of the owner and new president
- Negotiation of a compensation and equity package based on EBITDA targets
What Has Happened Since
- Company sales have grown significantly along with an 8% increase in gross margins
- New president has opened a new multi-million dollar market which as yielded an 8 ½ month business backlog
- Management team is aligned and focused on shared goals and strategic initiatives
- Former president retained in different, downsized role
