Imagine a world where construction firms began building without blueprints. Laborers simply arrive on a jobsite and start knocking down walls, pouring foundations and putting up structures, without having a plan to work from or an idea of what’s next. As obtuse as this situation might sound, a similarly troubling scenario is unfolding in the construction industry.
According to research by FMI Corporation, less than half of construction business owners have a succession plan in place. This fact is particularly concerning, as more than half of the respondents in that same survey indicated that they plan to transfer ownership of their businesses in the near future.
A succession plan—or a succession blueprint—is a formal, documented approach to the transfer or transition of power within the leadership of a business. It can be categorized in one of three ways: a planned transition; an unplanned departure; or an intermediate or temporary succession.
Having a vetted and documented succession blueprint in place is crucial for industry leadership. If you fail to plan, you plan to fail.
No Blueprint, No Action
So why aren’t more construction leaders taking action and putting a succession blueprint in place? It isn’t because of a lack of knowledge or the belief that having a plan is unnecessary.
When asked why they don’t have a plan in place, construction leaders often respond with, “We just haven’t gotten around to it;” “I’ve been too busy running the business to stop and do any planning like this;” or “We don’t have anyone specific in mind and simply don’t know where to start.”
While these answers are accurate and understandable, they’re really just excuses that justify a lack of action toward doing what needs to be done. Without a blueprint, leaders are leaving to chance the transition of power in their companies.
If It’s Important, It Gets Done
The key to creating a succession blueprint for a construction business is not in the work itself, but in making it a priority—not just to the company, but to the leaders. When leaders view activities as important to the success of the business, they are more likely to find the time to complete them, no matter how complicated or involved they may be.
In his work, “Effective Succession Planning in Construction Companies,” Researcher Anthony Perrenoud claims there is a higher correlation between the successes of a company with a plan than those without one. Perrenoud further asserts that construction companies that developed a plan using industry best practices produced a more qualified and thorough plan, allowing for the best possible outcome.
Being proactive before a crisis allows companies to experience greater success in the transition than those that are forced to approach succession only because of the leader’s poor health or death.
Your Succession Blueprint
There is no magic formula for creating a succession blueprint. Just as in construction itself, leaders may use multiple combinations of raw materials to create the desired end result. Here are some best practices to consider when creating your blueprint:
- Make it important to create a succession blueprint and get one started. The only wrong succession plan is the one not in place.
- Set a date for the transition, even if it is many years in the future. This gives people a realistic target well in advance of what is to come. Establishing this target now makes it real and allows the leader time to think about how the transition should occur.
- Establish a timeline to announce the leader’s replacement well in advance of their intended departure. This minimizes the confusion of who will take over. It allows people to become comfortable with the change in power.
- Create titles appropriate for the succession leader to convey a level of authority internally and externally.
- Speak life to the long-term success of the company during and after the transition through internal and external communication. Take the mystery away from the future well-being and success of the organization, because you have a well-developed succession blueprint.
Unplanned Departures & Temporary Successions
Both of these scenarios will be covered by the planned succession blueprint because the transfer of authority has already been identified. Carrying out the succession plan may get a little tricky due to the untimeliness of the departure.
However, if no plan exists, start with some incremental steps and put something down on paper. The following are a few minimal activities for you and your management team to consider:
- Decide who can take over based on the necessary qualifications. List every candidates’ pros and cons as they relate to the key areas of people (how well they work with others and can get people to work together), organizational intelligence (company knowledge), and drive (whether or not they are hungry for the chance to lead the company).
- Consult with other stakeholders. These could be executive leaders, the board of directors and family members who have stake in the business, to name a few. Including these key decision-makers in the early part of the planning process is valuable when it’s time to make the transition.
- Weed out candidates who are not willing. You are better off working with someone who may not be ready today but is hungry to prove themselves.
- Let every candidate know they are being considered for succession. This is not a promise and should not be worded as such, though.
- If no strong candidate is available, create a position for the transition and begin the hiring process. The money that may be spent on the new salary is well worth the potential heartache that lies ahead when no one is ready to lead the team.
- If a candidate is available within the company, ask them to list their own pros and cons using the criteria above. Compare the individual’s responses with your own and build out a leadership action plan. This plan should function as a self-assessed development tool that identifies the strengths and weaknesses of the individual and any and all opportunities for development.