SUCCESSION PLAN MUST BE IN PLACE – #79
THE MANAGEMENT LESSON IS TO:
HAVE A VERY CLEAR SUCCESSION PLAN IN PLACE THAT IS CLEAR TO ALL MEMBERS OF THE FAMILY OWNING THE BUSINESS, TO ALL MEMBERS OF SR. MANAGEMENT IF PUBLICLY OWNED, AND TO KEY EMPLOYEES IF DEEMED NECESSARY. THE PLAN SHOULD BE LEGALLY REVIEWED AND APPROVED ON AN ANNUAL BASIS TO INSURE ALL THE CHANGES REQUIRED ARE IN THE PLAN.
A letter from Martin L. Davey Sr. to his son which was read after the funeral services and has the following requests:
- Above everything make your word good.
- Think of your Clients before everything.
- If a client makes a complaint, see that it is promptly and fairly investigated and resolved. Remember the Client in 99.9% of the cases is right – they are your lifeblood.
- You can’t make good men out of poor ones. Don’t waste your time!
- Treat your employees as human beings.
- Good Sales Representatives should make good money – fire the poor ones.
- Protect your credit reputation with a jealous eye. It can’t be replaced.
- Watch expenses like a hawk. Remember you will always have employees who will be wanting to spend other people’s money. Write expense reports as if they would be published on the front page of the WSJ.
- “When in doubt do nothing”- Get more facts and weigh the arguments pro and con.
- Get things done – but don’t make snap judgments.
- You must make a reasonable profit if you expect to stay in business.
- Stay out of the banking business, through making loans to employees.
- Never do anything while you are angry.
- Pay a person everything that they are due. Any deviations from pay plan should be in writing.
- Don’t do something merely because a competitor does it.
- Please, Please, do not try to be popular with everyone in your business dealings.
- However, you should try to deserve respect. No trust if there is no respect.
- Beware of flatterers.
- Manage your own time, and see that all others respect your time. You are running a business.
- Delegate small details, you should not burden yourself with them.
- If you expect others to be diligent workers, you must be one yourself.
- You should be friendly in a moderate and reserved sort of way.
- You can never coast downhill – don’t attempt to feel that the work is done – it never is!
- Intelligent and properly harnessed selfishness is good for mankind.
- Beware of the creative and judicial mind. The creative – mind is the result of almost everyone believing that everything they have been told is true. We accept what we have been told and go on our way. In having this mind-set, is it any wonder that we have limited people who exhibit signs of original or creative thinking. On the other hand, you have the judicial mind-set, that is a mind that is victim of its own likes and dislikes, its prejudices, its preconceived notions, and its own peculiar idiosyncrasies. This mind-set judges everything on the basis of pure facts and proven merit. I urge you strongly to strive always to be judicial in your thinking about all things.
- It is well to work earnestly toward perfection. You will never reach it, but keep on striving for it, and your business will sustain the ups-and-downs of this rapidly changing world.
I have kept this article in my files since May 1990 (Family Business Magazine). I hope you get a chance to review the points given to Martin L. Davey Jr., by his father. Many of them can be applied today, and I sincerely hope that you file the points and use many of them in messaging your successor of what has worked in growing your business. During the last 40 years, I have used these points on numerous occasions because they reflect the previous 40 years of Mr. Davey Sr’s business experiences in growing his business. For 80 years, there have been tons of changes, but most of these 25 Principles still hold true.
Should you want to expand any of these points, please call me at 847-477-9465 or send me an e-mail stating your specific requests email@example.com.