How to make succession planning effective. That's the subject of today's show. Thank you for joining me on this edition of the Inside B.S. Show.

Hey now, it's Dave Lorenzo. I'm the godfather of growth and today's show is about how to make succession planning effective. I find that when HR consultants give advice to business owners like you, family business owners, on succession planning, it's good advice, but it's very theoretical.

It tends to be a lot of academic doublespeak or, well, I mean doublespeak may be a little too strong. It tends to be a lot of academic jargon. I want to give you practical advice today about how to make succession planning effective.

So here's how we're going to do this. I'm going to share with you what I did when I was a hotel manager and now what I do in our consulting business. I outline the job that we're succession planning for as detailed as possible.

So you'll see, I'm going to hold up on the video and if you're watching on audio, I want you to envision this. This is a checklist that I'm holding up here and it's my weekly checklist for the activities that I do. There's a page for every day of the week.

Here's the one for next week that I'm holding up here on the video and you see at the top, you may not be able to see this, it's kind of small on the video, but there's a day of the week at the top and there's a page for each day of the week and there's about, I don't know, 25 items on here for the role of the salesperson at Exit Success Lab. Each day I blast through this checklist. I spend my day completing that checklist and I'm one of the leaders of the business.

Nicola and I run the business together. I'm the business strategy guy, but I'm also the head of our sales initiative. So for me, hiring a salesperson means making them productive as quickly as possible.

If you're doing a succession plan, your goal with your succession plan is to make the person in the new role as productive as possible, as fast as possible. So from a succession planning standpoint, that person needs to know what they're getting into. So they have to have an accurate job description.

Then they have to have an action plan. So I love checklists for the day-to-day action plan. Then they have to know what the managerial responsibilities are.

So you got to outline those for them and teach them. And then they need to know how to be a leader. So you should be teaching them the leadership competencies as well.

The practical nature of this, the question was how do I make my succession plan effective? And that's why the title of this show is How to Make Succession Planning Effective. This question is all about making it practical. And that's why the HR folks fall short when it comes to succession planning.

And you need operators to help you plan for the succession of the CEO and everybody below them. I want you to spend this month going to your calendar and once an hour, write down what you've done for that hour. If you spent an hour on a Zoom meeting that was a waste of time, write Zoom meeting, waste of time, and the subject of that meeting.

But for all the time you're working this month, I want your calendar to be full of what those activities were. Then what I'd like you to do is I'd like you to have an administrative assistant, can be a virtual assistant, go back through your calendar and catalog everything. And she can use, he or she can use AI for this.

You can use Gemini, you can use a Claude, you can use ChatGPT, whatever you prefer, whatever large language model you prefer. Dump all that data in there, have it bucketed, categorized, and it will outline what you spend most of your time doing. Then you can go back and write a training schedule for each of those activities.

And then you train the next person or train the person who's going to fill your role, even if you're not planning on leaving your role for a year or three years. Start training people. The more people you can train, the better on the day-to-day operations.

That's continuity or contingency planning. The people who are in management need to also learn the management responsibilities, which include administrative responsibilities, and they need to be great leaders. So they have to understand the leadership competencies that your firm, your company embraces.

All of those things are important. All of those things are essential. But as a leader in the business, one-third of your time, I can't stress this enough, one-third of your time should be spent preparing someone for your role or teaching other people how to prepare people for their roles.

One-third of every manager's time should be spent teaching someone to do what they do. Why? That's how you add value to a business. My mission in life, my mission with you, is to enhance the value of your business, to help you protect your legacy, and to give you more options when you're ready to transition your business, whether you transition from president to CEO, from CEO to chairperson, from president, CEO, chairperson to just passive investor, or if you want to sell your business at some point.

You're going to have to plan for your succession, and everyone below you needs to plan for their succession. If you have this in hand, you got a succession plan in hand, and you go to sell your business, it's going to be worth at least 50% more than if you hadn't done that. Why? Because the coming in knows for every role there's somebody backfilling that role.

Somebody can do that job at 80% of the competency and capability of the person who's in it now. So when the CEO leaves, there's somebody who's 80% as good as that CEO. They're going to learn the 20% in the job.

Your family business is more valuable when you plan for succession. So how to make succession planning effective? Focus on it one-third of your time as the leader, and force your leaders in the organization to focus on it one-third of their time. That's how you make it effective, by thinking about it all the time.

The people who join our Exit Success Lab community, whether they're professionals who help us with our consulting work, or business owners with whom we work to increase the value of their business, everyone in our community focuses one-third of their time on training and preparing their replacement. That's it. Why do they do it? Because it makes the business more valuable.

So you want to make succession planning effective? Focus a third of your time on it. If you're working nine hours a day, three hours are spent on succession planning. You're working 60 hours a week, 20 hours are spent on succession planning, either for you and your role, or making sure other people are teaching people in their role how to get ready.

That's how you make succession planning effective. This is the Inside B.S. Show. My name is Dave Lorenzo.

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I'll see you tomorrow at 6am. Until then, here's hoping you make a great living and live a great life. Thanks for joining me.

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