Global Business Leaders Say This Is the 1 Thing They Fear Most

Finding, training and retaining next generation leaders is the biggest challenge for executives around the world, according to a recent survey.

The Global Leadership Forecast, collaborating with leadership training institute DDI, research association The Conference Board and consulting firm EY, polled 25,812 leaders and 2,547 HR personnel at 2,488 organizations across 26 industries from all over the world.

The leaders were given 28 different challenges for CEOs they could rank and “Developing next generation leaders” and “Failure to attract top talent” were the two that ranked in the top five challenges the most.

The top 10 CEO challenges according to the report were:

  • Developing next-generation leaders–64 percent

  • Failure to attract top talent–60 percent

  • New global competition–48 percent

  • Cybersecurity–28 percent

  • Slowing economic growth in emerging markets–25 percent

  • Labor relations–24 percent

  • Global recession–22 percent

  • Income inequality/disparity–21 percent

  • Outdated/insufficient national infrastructure–20 percent

  • Global political uncertainty–18 percent

Only 41 percent of the HR personnel polled believed their company’s leadership development program to be of high or very high quality, meaning that almost 60 percent rated theirs to be mediocre or worse.

Fortunately, the study, which is updated annually and is in its eighth year, also has actionable takeaways for how to prepare the future leadership of your company.

To develop the next generation of leaders, first you have to identify them. To help you identify these future leaders and develop them, follow these five steps in your organization:

1. Assess and plan.

Start with a candid assessment of your leadership development strategy and programs at all levels. Create a plan to support leadership development efforts with the goals of supporting successful leaders now and also building a leadership pipeline for the future.

2. Create and ensure.

If you don’t have one yet, establish a leadership capability model so you can ascertain if your leadership development program is working. As part of that capabilities model, ensure that leaders are equipped with the skills to identify and develop top talent. This will keep your pipeline of leadership candidates flowing.

We’re lucky as entrepreneurs–most of our organizations are smaller and in growth mode, which makes it much easier to identify potential leaders. I take pride in the vigorous recruiting process at my companies.

We never consider time spent for hiring as lost time. Rather, it’s an investment in the future of the company.

3. Review and monitor.

Review all of your leadership management systems and enhance them in ways that will allow you to build a cadre of competent leaders. In order to really know if your leadership development is working, you have to systematically monitor the effect it is having on the company. Gather data to see if it is helping the organization reach its strategic goals.

4. Articulate and deepen.

Have a way to articulate the impact your leadership development is having on your organization and what deficiencies it may have, as well as plans to address those deficiencies. Once you have everything in place, deepen your bench of potential leaders.

The downside of having a great leadership development pipeline is that other companies are going to come sniffing around to take advantage of your hard work, but if you have replacements at the ready, that will lessen the impact of leaders leaving.

5. Enlist and hold.

Enlist the help of your own c-suite and other business leaders who are not currently involved with your company to assess the effectiveness of your leadership programs, and also to act as mentors for future leaders. Hold leaders accountable for the development of their teams, particularly future leaders.

What to look for in future leaders

In my own experience, I’ve found that future leaders have an abundance of passion and motivation. To gauge just how passionate and motivated people in your organization are, seeing how they respond to an issue is helpful.

We had an unexpected issue with our e-commerce site that caused an immediate decrease in traffic and conversions years ago when most businesses were still using custom shopping carts. Three people within my organization immediately took the lead to fix the issue we were having, and their enthusiasm and passion told me these three were leadership candidates. Years later and all three of them have climbed their way up the corporate ladder to management positions.

With practice and a comprehensive leadership plan in place, you can spot the best candidates for next generation leadership positions and develop them into competent directors, managers and officers.

When You Follow a Legend, You Can’t Be Meek

Taking the leadership job is tough enough.  But there’s an even higher degree of difficulty in being Act Two, following in the footsteps of “larger-than-life” founders like Steve Jobs or Bill Gates or Sam Walton as they move away from the day-to-day of a thriving business or sell the whole shebang and leave you holding the bag for the new buyers. Even if most of the miracle tales of superhuman struggles and successes ripped from the jaws of certain defeat are somewhat inflated, these founders got the deals done; the investors and customers appeared; and serious businesses got built.

Following such an act is not going to be easy. But, as the Navy Seals say, there’s no easy way and the only easy day was yesterday. The initial change and transition in some cases might just be something as simple as: (a) the team deciding it’s time for the CEO to stop selling directly  and for him or her to focus more on financing, strategy, strategic partnerships and other matters; or (b) it could be a big company-wide reorganization with you taking on a lot of new reports and responsibilities or (c) because dreams sometimes do come true, maybe the board or new owner decides that you’re the right one right about now to get the job done.

Congratulations, the spotlight’s shining on you and it seems like the whole world is watching. Showtime! No more rehearsals, second chances or do-overs. And understand that while the process is important, and good consistent and clear communication is critical, this whole transition thing is much more about the people than anything else. I’m talking about the ones who are coming, the ones who are staying, and the ones who are going –voluntarily or otherwise. If you get the people part done well, the rest of the transition will be a lot easier– because you won’t be doing it alone.

And, while we’re on the subject of staying or overstaying one’s welcome, I’d say, without seeming too callous, that the transition will have less friction if the founder becomes less visible and less active in the business. Founders have a tough time letting go and an inordinate fondness for the past and the ways that business used to get done. Of course, you might get lucky and have a real ally on your side, someone who knows where the bodies are buried and which people and other pitfalls to avoid. Because absolutely everyone’s got an agenda.  The best change managers, just like the best managers in baseball, are the ones who can keep the players who hate them away from the ones who haven’t made up their minds yet. So, don’t be too quick to shove anyone out the door. Good help is hard to find.

And, to be clear, figuring this stuff out on the fly is a real bear. But there are a few ground rules that can help you make it through the gauntlet without losing your soul or any skin in the process. Keep in mind that these are basically tactical suggestions: that is, defining the long view, setting the overall vision and strategy, and building critical cultural fit as well as social capital are topics for another day. First things first: you can’t build a new foundation if the place is on fire.

The first rule is to control your calendar and make sure that you are running the show.  You have to rule your inbox, not the other way around. Everything isn’t an emergency and not everything has to be done yesterday. Your time is scarce and precious, unlike some of the people you’ll have to deal with, who have nothing but time and are always looking for ways to justify their existence as well as to  waste your time. Media mavens, public officials, job seekers, and a million other people with a cause will all appear at your doorstep looking to offer advice and asking for favors, resources, and assistance.

And, while the founder knew the ones who were full of it and figured out early on how to avoid them, you’ll have to suffer these same so-and-so’s for a while. But you can be smart about it. You can also expect all kinds of other unwelcome “experts” to come out of the woodwork.  Mentors, advisors, and board members who suddenly return to life with only the best of intentions. I’d suggest that  board members in particular should wait a while, to be specifically asked for their help, before rushing in. 

The second rule is to quickly re-recruit your key players and to get the spectators off the field. Work from the inside out and fix the folks first. Focus on keeping the ones who can get you to where you need to go – the ones who’ve been there before – and not simply the “nice” ones who don’t have any other place to be. Your job isn’t to defend yesterday; it’s to build for tomorrow. Change is hard for anyone and people – regardless of their age – don’t like it and they like surprises even less. Ambiguity is a culture-killer and  sometimes any decision, right or wrong, is better than limbo. The sooner you let all the people know who’s staying and who’s not, the happier everyone will be. The worst thing to do is the “salami” solution – continual small slices and repeated layoffs with no end in sight. Go early and go deep – 2x is better than any piecemeal plan. And remember that the people who come back to haunt you aren’t the ones you let go; they’re the ones you should have fired and didn’t.

The third rule is: don’t let anyone make a liar out of you. People who aren’t committed – people who are just biding their time and phoning it in – are the ones who you need to confront and convert or tell to take a hike. You need to get any resistance out in the open. People don’t like conflict and will try to hide any bad news until the last possible moment when it’s often too late to fix. Tell your people what you expect, what that will entail and require of them, and how their results will be measured. Commitments from these people in words, but not actions are worthless. Don’t confuse their good manners with agreement. As Samuel Goldwyn used to say: tell me the truth even if it costs you your job. In the real world, the truth only hurts when it ought to, and there’s no need to make or take things personally, but having straightforward and direct conversations as early as possible is essential.  And don’t accept apologies (or promises to do better next time) from people who don’t change their behavior. These aren’t apologies – they’re insults.

The fourth rule is to fix a few things fast if you can. If you can’t commit to major changes overnight (and you shouldn’t), commit to what you can do and get those things done. Ordinarily, I suggest that, if you have to eat a bunch of frogs (problems), you swallow the biggest one first. But, in this context, it makes much more sense to watch for a while, understand the culture, get the leaders and the influencers aligned with your vision and aspirations, get buy-in from your board, and then move quickly to make the bigger changes once you’ve made the decisions. In the meantime, shoot for small victories, visible results, quick turnarounds and then make sure that you celebrate those early successes.

And finally, don’t spread yourself too thin or try to be Superman. Set the major goals and objectives and let your team implement the strategies. Let them do their jobs. This involves and empowers them and gets them into the game rather than sitting on the sidelines waiting to be told what to do. And, most importantly, it gives them a real sense of controlling their own destiny.

 

When You Follow a Legend, You Can’t Be Meek

Taking the leadership job is tough enough.  But there’s an even higher degree of difficulty in being Act Two, following in the footsteps of “larger-than-life” founders like Steve Jobs or Bill Gates or Sam Walton as they move away from the day-to-day of a thriving business or sell the whole shebang and leave you holding the bag for the new buyers. Even if most of the miracle tales of superhuman struggles and successes ripped from the jaws of certain defeat are somewhat inflated, these founders got the deals done; the investors and customers appeared; and serious businesses got built.

Following such an act is not going to be easy. But, as the Navy Seals say, there’s no easy way and the only easy day was yesterday. The initial change and transition in some cases might just be something as simple as: (a) the team deciding it’s time for the CEO to stop selling directly  and for him or her to focus more on financing, strategy, strategic partnerships and other matters; or (b) it could be a big company-wide reorganization with you taking on a lot of new reports and responsibilities or (c) because dreams sometimes do come true, maybe the board or new owner decides that you’re the right one right about now to get the job done.

Congratulations, the spotlight’s shining on you and it seems like the whole world is watching. Showtime! No more rehearsals, second chances or do-overs. And understand that while the process is important, and good consistent and clear communication is critical, this whole transition thing is much more about the people than anything else. I’m talking about the ones who are coming, the ones who are staying, and the ones who are going –voluntarily or otherwise. If you get the people part done well, the rest of the transition will be a lot easier– because you won’t be doing it alone.

And, while we’re on the subject of staying or overstaying one’s welcome, I’d say, without seeming too callous, that the transition will have less friction if the founder becomes less visible and less active in the business. Founders have a tough time letting go and an inordinate fondness for the past and the ways that business used to get done. Of course, you might get lucky and have a real ally on your side, someone who knows where the bodies are buried and which people and other pitfalls to avoid. Because absolutely everyone’s got an agenda.  The best change managers, just like the best managers in baseball, are the ones who can keep the players who hate them away from the ones who haven’t made up their minds yet. So, don’t be too quick to shove anyone out the door. Good help is hard to find.

And, to be clear, figuring this stuff out on the fly is a real bear. But there are a few ground rules that can help you make it through the gauntlet without losing your soul or any skin in the process. Keep in mind that these are basically tactical suggestions: that is, defining the long view, setting the overall vision and strategy, and building critical cultural fit as well as social capital are topics for another day. First things first: you can’t build a new foundation if the place is on fire.

The first rule is to control your calendar and make sure that you are running the show.  You have to rule your inbox, not the other way around. Everything isn’t an emergency and not everything has to be done yesterday. Your time is scarce and precious, unlike some of the people you’ll have to deal with, who have nothing but time and are always looking for ways to justify their existence as well as to  waste your time. Media mavens, public officials, job seekers, and a million other people with a cause will all appear at your doorstep looking to offer advice and asking for favors, resources, and assistance.

And, while the founder knew the ones who were full of it and figured out early on how to avoid them, you’ll have to suffer these same so-and-so’s for a while. But you can be smart about it. You can also expect all kinds of other unwelcome “experts” to come out of the woodwork.  Mentors, advisors, and board members who suddenly return to life with only the best of intentions. I’d suggest that  board members in particular should wait a while, to be specifically asked for their help, before rushing in. 

The second rule is to quickly re-recruit your key players and to get the spectators off the field. Work from the inside out and fix the folks first. Focus on keeping the ones who can get you to where you need to go – the ones who’ve been there before – and not simply the “nice” ones who don’t have any other place to be. Your job isn’t to defend yesterday; it’s to build for tomorrow. Change is hard for anyone and people – regardless of their age – don’t like it and they like surprises even less. Ambiguity is a culture-killer and  sometimes any decision, right or wrong, is better than limbo. The sooner you let all the people know who’s staying and who’s not, the happier everyone will be. The worst thing to do is the “salami” solution – continual small slices and repeated layoffs with no end in sight. Go early and go deep – 2x is better than any piecemeal plan. And remember that the people who come back to haunt you aren’t the ones you let go; they’re the ones you should have fired and didn’t.

The third rule is: don’t let anyone make a liar out of you. People who aren’t committed – people who are just biding their time and phoning it in – are the ones who you need to confront and convert or tell to take a hike. You need to get any resistance out in the open. People don’t like conflict and will try to hide any bad news until the last possible moment when it’s often too late to fix. Tell your people what you expect, what that will entail and require of them, and how their results will be measured. Commitments from these people in words, but not actions are worthless. Don’t confuse their good manners with agreement. As Samuel Goldwyn used to say: tell me the truth even if it costs you your job. In the real world, the truth only hurts when it ought to, and there’s no need to make or take things personally, but having straightforward and direct conversations as early as possible is essential.  And don’t accept apologies (or promises to do better next time) from people who don’t change their behavior. These aren’t apologies – they’re insults.

The fourth rule is to fix a few things fast if you can. If you can’t commit to major changes overnight (and you shouldn’t), commit to what you can do and get those things done. Ordinarily, I suggest that, if you have to eat a bunch of frogs (problems), you swallow the biggest one first. But, in this context, it makes much more sense to watch for a while, understand the culture, get the leaders and the influencers aligned with your vision and aspirations, get buy-in from your board, and then move quickly to make the bigger changes once you’ve made the decisions. In the meantime, shoot for small victories, visible results, quick turnarounds and then make sure that you celebrate those early successes.

And finally, don’t spread yourself too thin or try to be Superman. Set the major goals and objectives and let your team implement the strategies. Let them do their jobs. This involves and empowers them and gets them into the game rather than sitting on the sidelines waiting to be told what to do. And, most importantly, it gives them a real sense of controlling their own destiny.

 

5 Reasons Why Your Business Needs a Clear Succession Plan

I recently suffered the sudden loss of my father, who fell ill following a brief battle with pneumonia. After the grief and recovery from the initial shock of the loss, I had to begin the daunting task of filtering through his financial affairs, which was quite complicated. 

More than personal expenses, the one issue that my father omitted from his Will was a clear succession plan for his business. It took nearly 25 years to build, and his sudden passing to lose sight of the plans and forecasts he had for the company. As a result, there is a gray-area, where he discussed who should take over the company, but never memorialized it for full clarification. 

I believe that we are all optimistic about life and the success of our businesses, such that we negate the importance of effective succession planning. Whether you are a thinking of starting a business, a sole-practitioner, start up or the founder of a successful company; succession planning is necessary, but often overlooked.

There is no joy in thinking about illness or death, but unexpected life events can cause a negative domino effect within the formative years of a company. My fathers’ passing gave me a real wake up call about the reason I built my company and the importance of creating a 100-year plan to carry on my life’s work, legacy and contributions. 

Here are five reasons you need to get serious about creating your strategic succession plan that will continue to create a generational impact and carry on your legacy.

Choosing your successor will take time.

This is not an emotional choice, it is a leadership decision based on the characteristics of the person, or team, who can carry on the baton to further your investment in the company. Think outside of friends and family, if needed, and appoint the best leader with the approval of your advisory team. 

Seek the advice of your financial planner and attorney .

As participating members of your advisory board, they will have a crucial role during the planning phase to advise you of the best choices based on the current and future value of the company. Make sure your board approves your successor(s) by unanimous vote and set the terms in the bylaws of the company for all of the members of your team/staff to create a smooth transition. 

Your legacy depends on it .

What if you become ill or pass away? How will your legacy be memorialized? The job of a great leader is to identify and mentor their successor(s) who will continue to move the company forward. Remember, there is more at risk than just your business, it is also your legacy. 

Generational wealth and directives .

 ”Business owners who don’t have a succession plan are putting a lot at risk if they hope to someday cash out at a fair price and/or ensure that their companies survive them,” according to an article by CNBC. A succession plan will provide a clear agenda and create generational directives and bylaws for future successors of the business. Your business should not dissolve once you are no longer present. 

Memorialize your hard work.

Building and scaling a successful business requires an immeasurable level of sacrifice. Do not devalue your own sacrifices because you refuse to think of the long-term value of your company.

My father always thought 20 years ahead, but did not plan for 20 years ahead for his company. “While succession planning is a challenging task, it is worth the reward of watching your business grow and succeed in the next generation,” according to SCORE, a resource partner of the Small Business Administration.