Building Bench Strength - an Overview
Finding and then keeping the best people for your organization is pivotal to your business growth. It is important to the company’s ability to survive a transition and it is critical to your ability to effectively move on to your own next stage. Without a group of people functioning together to run the business, you’re likely to remain stuck in the middle between wanting to go and needing to stay.
A strong and functional leadership team is one of the most important contributors to overall business value. It reinforces credibility about the likely success of a transfer of ownership and is carefully considered in equity investment conversations. A strong team demonstrates that the ability to run the company resides in the hands of more than one and, more importantly, is demonstrated by people other than the owners and founders.
Further down in the organization, bench strength is demonstrated by the availability of skilled and high performing talent in any number of critical positions within the company. If there are particular technical demands in the company’s product or service, does the talent reside in the company? Is it securely positioned or is it getting ready to walk out the door?
What processes does the company have for identifying and developing talent to meet current and future demands? Is there likelihood that an aging workforce will create a substantial drain as they retire? What are you doing to bring in and train younger generations to assume key positions? These are the types of considerations that businesses take into account when they look at who will lead.
How do you know if your bench is strong?
Companies demonstrate bench strength when they demonstrate an ability to produce and perform consistently over time. They have a track record that demonstrates they can adapt to changes in business and shifts in economic conditions. Strong management teams not only lead a business based on predefined goals created in conjunction with ownership; they lead the business based on the company’s vision and culture. They lead the business in a manner that demonstrates that they are able to do more than respond to quarterly goal setting and annual reviews.
A strong team has the ability to bring forward issues that could jeopardize or enhance the vision for the company. They can help business owners anticipate when and where there might be flaws in the plan, the process, or the performance of the company. Strong teams can identify where weaknesses lie and what strengths can be maximized. They are invaluable in creating solutions to address long term needs and in responding to a lapse in short term performance.
One of the most commonly held measuring sticks of bench strength is dependence on the owner. While not a scientific data point, the question every owner will ultimately ask is: “Can I be away from the business and have it continue to perform?” Frequently the litmus test is time away from the company. Ask yourself if you are able to be away from the business long enough (and completely enough) to:
- Take one or more long-anticipated family vacation(s) – lasting more than a weekend or even more than two weeks.
- Direct your attention to other activities of personal passion – volunteerism, charity work, and community leadership – without fear the business will stall out in your absence.
- Work on a pet project (business or personal) that has been on hold because of your time commitment to the day-to-day business.
As important as the time away – which may be counted in days, weeks, or even months – is: What happens while you are gone?
- Is your company able to continue according to plan to achieve the goals and objectives that have been agreed upon?
- Does the company retain the same sense of urgency that you’ve worked so hard to instill or does everything slow to a snail’s pace because your presence isn’t felt on a daily basis?
- Do employees continue to demonstrate, and benefit from, adherence to company values?
- Does your leadership team create an atmosphere of confidence during your absence or do you return to find people waiting at your doorstep begging for attention?
- Upon your return, do you hear strong positive responses from customers that mirror (or even surpass) those you’ve come to expect?
- If you are trying to focus on a project, are you given opportunity to get it done or do you find yourself drawn back into the daily mix?
- Can the team manage the company’s dashboard and provide you with the data that helps you remain informed about business performance?
Over time your presence or absence should mean little to the daily performance of the business. The strength of your bench is apparent when you have leeway to be as engaged as you want to be for special projects, events, or circumstances and as removed as you desire for the other elements in your life that give you personal satisfaction.
How do you make it stronger?
It would be simple to have a strong bench if people and businesses remained static. If you could identify the skills and abilities needed to perform a job and then could count on having that job remain exactly the same year after year, it would be so easy. Of course, reality is exactly the opposite. The jobs and people – including you – must change with the needs of the company. So the ultimate opportunity to build a strong bench begins when you:
- Define clear vision and values for where the company is headed.
- Complete your due diligence to define the skills and abilities needed by the leaders in your company.
- Work hard to make certain the right people are on board and that they are performing the job that is right for them; even if it means some people have to change seats or leave the company all together.
With this as your foundation it then becomes critical that your leadership team is able to extract three key promises.
First, that they will be viewed and treated as leaders in their own right. They deserve the opportunity to perform – pass and fail. And, they must be seen as having a level of autonomy that affirms decisions are within their realm and that they aren’t just placeholders doing the bidding of an absentee owner.
Second, they are prepared for and can expect to be held accountable. The members of the leadership team must be expected to do just that – lead. If there are performance struggles or mistakes, it is important to remember that they deserve the respect of accountability. Bench strength isn’t built by having errors ignored or swept away. Leaders don’t get stronger when owners step in to take up the reigns. Instead, they should expect the coaching and mentoring that will help them see, explore, and recover whenever possible. They also should expect the level of honesty that will address performance flaws – whether they are temporary or fatal.
Given the opportunity to understand where things went wrong and realign to make corrections is a true measure of leadership growth. At the same time, the success they achieve as they take on broader aspects of true leadership needs to be credited. Recognition of their individual and collective levels of performance should be hearty and heartfelt. Their rising level of success is a credit to your skills as an owner with a vision for the future of the business.
Third, they must be able to expect and accept professional development. Hiring individuals to perform in a leadership role doesn’t mean development is done, actually, it’s just the opposite. Setting performance and development goals will help the team focus on the skills and abilities that will drive leadership. The ability to grow and change in a position that is also growing and changing is paramount to the creation and retention of your bench.
The methods for professional development can depend on what the business requires for a stronger leadership. Professional development might mean formal coursework. It might also be delivered through reading, self-study, workshops and apprenticeships. It might even become just one part of the ongoing conversation you and your chosen leaders enjoy.
Decisions about when and the method for professional development can be incorporated into conversations about performance goals. They might also be addressed at any time a particular challenge indicates a lack in depth of knowledge, skills or ability to navigate it successfully. Managed within a positive frame of reference, opportunities for ongoing professional development can serve you and your leaders as they continue to grow into their ability to successfully perform.
How do you identify and build your future workforce?
Every good owner is keenly aware of how important a skilled and enthusiastic workforce is to the viability of their business. Finding, securing, training, and retaining over time is a constant in the equation for business success. Even as you manage your current employee group, a vigilant business is scanning for its future workforce.
In fact, you might already be looking at your future leaders within the confines of your current business. More and more, companies are beginning to successfully manage future workforce through the creation of vehicles for in-house development. Often a company can identify future “stars” and then diligently provide growth opportunities. Corporate leadership academies are the result of a diligent look forward at what the company will need and which current employees can be developed to meet them.
Likely, however, your future workforce is still being discovered and it is both unique and changing. Those employees who joined you when the business first started 20 or 30 years ago are very different from those who might be joining you today. Expanding world influences and global connectivity have done a great deal to create a new and different workforce with each generation. Your company’s ability to meld these generations into a cohesive unit is what creates a thriving workforce.
We are at a time when our millennial generation is just reaching the age where leadership is their next horizon. They are the new bench. When you look toward the future leaders of your company, you are likely going to be looking at this age group as your candidate pool. So, what about them?
Millennials are the product of a generation of affluence. They have had and understand power and access to both people and things. They are driven to consume and at the same time they understand the need to save for the future and have passion to share their benefits with others. Millennials will mobilize for change even in the same breath they express a desire for stability. You may often find this generation of leaders more positive about the potential for future success and at the same time frustrated by a lack of solutions for how to get there.
Despite the commonly held belief they lack motivation, millennials will tell you they are highly motivated but that it takes a different form. It may not look like what we’ve come to understand as the picture of a driven, motivated employee. In this generation the desire for a balanced life is more than just a catch phrase. It drives decisions about work hours, professional growth, risk-taking and even pay. Millennials in leadership might tell you that they will perform mightily, but their hours of performance might be between midnight and 10AM. They will describe commitment and diligence and will do so in the same breadth they question decisions and expect time off in the middle of what might be the busiest season.
Your future workforce expects as much from you as you might them. They want to know that your company is current and diligent in its own development. Does it strive to be a forward-thinking company regardless of the product you make or the service you provide? Does it truly value its employees and does it actually adhere to the values expressed in promotional literature? They want to know that you consider them a resource in decision-making and that their thoughts and influence will be heard and respected.
As they become your company’s leaders, keep in mind:
- The generational flux will begin to subside, with more potential employees looking for companies to whom they can pledge their loyalty, grow within, and create social networks that benefit the individual and his or her family.
- You want to be the type of company to whom you could pledge your loyalty – fair, compassionate, evolving, enjoyable, flexible and sustainable – and you will attract the best and the brightest stars.
Where can you get more information?
If you would like more in-depth information or would like help in any other aspect of running a family-owned or closely held business, please contact us.