October 8, 2009

Construction firm owners: Are you ready to retire?

Turner

AS THE FOUNDER AND OWNER of a construction-related company, do your employees rely on you to be THE answer person — meaning you, and only you, make the most important decisions in your company? Have you been thinking about slowing down or possibly retiring, but don't know how the business could ever run without you?

If you answered yes to these questions, then now is the time to identify the best people to manage and lead your organization, and to prepare them for running the company without you.

What's next?

Identifying the best people to lead and manage your organization is no easy task if you have been the go-to person since you founded the company.

Even if you have family members involved in your business, you may find that they do not have the interest or skills necessary to actually take over the helm of your company. You may also find that your company has grown significantly and has become a more complex organization since the time that you founded it, and there is no “one person” who has the capabilities to step in and run it.

As a successful business, you must already have capable people in your organization who shoulder significant management and leadership responsibilities. They are already important to your company's success, but they may be “functional” leaders and managers, responsible only for one area of your business. They will need to operate more broadly — not just go forward with what's good for their functions, but with what's good for the overall company's success.

Setting up a team

One strategy for transitioning the management of your business to others is to create an executive management/leadership team and to begin to groom your key leaders and managers to be effective decision-makers, capable of leading your organization as a team. The idea is to form this executive management team while you are still at the helm so that this team can begin to take on more and more of the responsibilities for running the company, while you are still around to guide and mentor.

This is an effective strategy, even if you think you might eventually want to sell your company. A prospective buyer needs to see that your organization has a built-in leadership and management capability that goes beyond its owner. Also, if you unfortunately incur an illness or even death before you choose to retire, this strategy strengthens your company so that it can carry on without you and maintain and increase its potential value.

Here are some things to think about in terms of transitioning the management of your company to a new structure that is led and managed by an executive team, potentially made up of family and non-family members:

• What are the strengths and areas for development of family members that are involved in your business?

• What roles are your family members playing in your business? Objectively, what roles could they be groomed to take on for the future?

• Who are your key managers/leaders? What are their strengths and areas for development?

• If you decide to create a new executive management/leadership team, who will you choose to put on that team? For each candidate, why would you choose him or her?

• What is the current structure for communication and decision-making in your organization? What will be needed in terms of communication and decision-making, if you step back from the helm?

• What is the culture like in your organization? What values do you want to be sure are carried forward in your organization, even if you are not the one managing or leading it?

Keys to an effective team

You may already have senior leaders and managers in your company that meet as a group, when an issue arises that you all need to discuss. You may even call this group a management or executive team. However, this team is not really an effective executive management/leadership team if it does not make decisions as a team and is not operating from a common overall mission, vision and goals.

To be an effective executive team:

• Each team member needs to choose to be on the executive team, be committed to being a significant part of managing/leading the overall organization, and be willing to learn how to manage the dynamics of a team environment. You may have a key manager who you think belongs on the team, but who does not want to make this commitment.

• One of the first things the executive team needs to do is to align around its common purpose as a team and the mission and vision of the organization.

• Executive team members need to be rigorous in meeting regularly, in addition to their other job responsibilities, so that they can make decisions together about the overall management of the company. Each team member must make the time commitment that is necessary to prepare for and attend team meetings.

• Executive team members must agree to be open, honest and straightforward in their communication with each other. In the beginning, using an outside facilitator can really help the group to learn how to communicate and work together effectively.

• As an owner, you will need to create an environment where the executive team gets past deferring important decisions to you.

Not an overnight success

Once you decide to form an executive management/leadership team, it takes time before that team really can operate smoothly and be able to run your company without you. That's why it's so important to get this team structure in place long before you plan to officially retire or step back from your business.

Roz Turner is the founder of Roz Turner & Associates, a management consulting and leadership development firm based in Bellevue.

Previous columns:

• Seattle Center tests new porous pavers, 10-01-2009
• Daniels breathes new life into aging sanctuary, 09-24-2009
• WSDOT gets a tip from Canada on road paving, 09-17-2009
• WSDOT shrink wraps bridge to protect environment, 09-10-2009
• Worker shortage looms in nation's steel mills, 09-03-2009
• Got a polluted site? Try a little fungi, 08-27-2009
• McKinstry hires former school superintendent, 08-20-2009
• Paving industry warms up to new asphalt, 08-13-2009