Issue link: http://read.dmtmag.com/i/81015
MANAGEMENT Business owners should have a plan in place for who will follow in their footsteps. Photo: Goodshoot/Thinkstock Selecting & Training Your Company's Next Leader By Greg Scott Succession planning is an often-neglected yet vital task espite their many differ- ences in business strate- gies and leadership styles, all entrepreneurs who lead a suc- cessful winery or vineyard face a common management challenge – and it's one they are often reluctant to tackle. It's succession planning – the task of identifying and develop- ing the individuals who will lead the company in the future. It also entails making many of the crucial decisions and arrangements about ownership rights after the transi- tion occurs. There are many reasons leaders postpone serious succession plan- ning. Among them are the pressing demands of daily business, the fear AT A GLANCE Succession planning is a task many business owners avoid. A succession plan should be a long- term effort, not a quick fix. Like a will, the plan should be set down in writing. Pertinent details should be dis- cussed with family members, managers, employees and other stakeholders. 70 VINEYARD & WINERY MANAGEMENT SEPT - OCT 2012 of sowing family discord, unwill- ingness to confront one's mortal- ity, and aversion to giving up the reins. Finally, there is the anxiety company leaders in the wine indus- try have about their own financial future. And yet the very purpose of succession planning is to preserve and enhance the value and viability of the company — which, in turn, protects the wealth of the owner and his or her family. One way to allay owners' finan- cial concerns is through a sophisti- cated planning tool that determines whether the family has sufficient wealth to support its members' life- styles well into the future. Often the analysis reveals that a family has greater financial security than the business owner realized. The results of such an analysis are very useful to have when developing an effective succession plan. Now, some business owners may think they already have a suc- cession plan in place, when in fact what they have is the outline of a plan — an unfinished concept of what they hope will happen some- day. Few leadership transitions go smoothly without a formally docu- mented plan. Lack of a formal plan tends to result in decisions made in haste when the company leader falls ill or announces his or her imminent retirement. This can lead to clashes within the family; uncertainty and doubt among employees, custom- ers and suppliers; and a rudder- less company facing an uncertain future. While each company's succes- sion plan is unique to that company and the family that owns it, there are common aspects to all success- ful plans: 1) It should be a long-term effort, begun early and modified over time; 2) It should be in writing; and 3) Details of the plan should be discussed with family members, and pertinent aspects should be shared with managers, employees and other stakeholders. Succession planning is not an undertaking to be carried out in secret. Though some members of the family or business might be unhappy with aspects of the plan, full disclosure is the only sure way to earn their eventual support and to resolve conflicts. Remember, no one can support a plan that doesn't exist. KEY STEPS IN CONSTRUCTING A PLAN Have the business appraised. Most vineyard and winery owners hope that ownership will remain in the family. However, to determine whether this is even feasible – or WWW.VWM-ONLINE.COM