Attention business owners, is the thought of leaving work to take a vacation, to take care of a sick loved one, or to just have some time to yourself, keeping you up at night? Are you losing sleep over being able to have your business run when you're not around? If you answered yes to that question, you need to join me for this episode of The Daily Dose of Dave on the Inside BS Show. Hey now, I'm Dave Lorenzo, I'm the godfather of growth, and today we're talking about succession planning in your business. And this is not a full-blown succession planning session.

What this is, is it's a succession planning wake up call for you if you're a business owner. If your business cannot run without you, you don't have a business, you've got a job. It's a fact, it just is a cold, hard fact.

Last week we talked about the three things that need to be in place in order for you to be able to sell your business. And I'll put a link to that show, it was just a nine minute, I think, show. I'll put a link to that show in the show notes today.

One of the things in order for you to be able to sell your business is that your business has to be able to run without you. Your business has to be a standalone, independent, going concern. If your business can't operate without you, you don't have a business, you've got a job.

So succession planning is all about getting your company ready from a human capital standpoint to operate in your absence. And when we talk about succession planning, there are four competencies we have to manage. And then there are three different tracts within our organization that we have to apply these competencies to in order to have a full blown succession plan.

Now let me explain. The competencies that I'm talking about are skills, knowledge, talent, and experience. So if you think about the people in your organization, they all have skills, knowledge, talent, and experience.

Now when we talk about the tracts for succession planning, there's a leadership tract, which is what you are on because you're the owner. There's the management tract, which is handling processes, procedures, and the specifics of handling a role and the people in that organization. And then there's the individual contributor tract.

And we'll talk about each of these tracts and how the competencies apply to them in a moment. So when we talk about these four competencies, let's examine them in a little bit more detail. Skills.

What are skills? Skills are role specific activities that the individual has mastered or will need to master in order to be proficient in that role. So they are role specific activities that the individual has mastered or will need to master in order to be proficient in that role. And skills can be learned.

So skill development happens through teaching. When we talk about knowledge, knowledge is the capability and understanding of all the activity required to be competent in that position. Knowledge can be learned.

When we talk about talent, talent is innate ability to perform a role at a very high level. Talent is inborn. You bring that to the table.

And I'll give you examples of each of these in a moment. And then the final element is experience. And experience is something that comes with time and exposure.

So you're exposed to the tasks, the skills over time and you master them. That's called experience. So for every role, there are skills, knowledge, talent and experience.

Let's say you're in sales. The skills you need to acquire in sales are skills that are specific to how to start a conversation with a prospect, how to generate interest, how to get a prospect to take the next step in the sales process. And then how to close the deal and then how to follow up and get a referral after you close.

Those are specific skills related to sales. Those can be taught. So one salesperson can teach another salesperson.

A sales trainer can teach a salesperson or a manager can teach the salesperson. Then there's knowledge. And when it comes to sales, if you're selling a product or a service, there's product or service specific knowledge.

You need to know everything there is to know about the widgets. And then there's knowledge related to the company. There's knowledge related to the industry and there's knowledge related to the benefits that your product or service provides.

You can learn that through exposure. You can also learn it through teaching. So you can learn it in a formalized training environment or you can learn it just doing ride alongs with people who are already successful in that role.

Talent is something that you're born with. For example, I have an innate ability to be a speaker, to speak in public, to speak in front of audiences. I was born with that.

My parents used to say, my teachers used to say it was the gift of gab. That's an innate ability. But I still need to acquire skills at speaking in front of an audience.

And I need to acquire the knowledge to be able to deliver a good speech. But the talent to do it is innate in me. There are people who are just uniquely talented salespeople.

They just have an innate ability to connect with people, bond and build rapport at the next level. And that's an innate talent. You can't teach that.

So when you're hiring people and you're thinking about succession planning, you need to map out what the talent is that people need. And you need to find people with that talent first and then teach them the skills. Give them the knowledge.

Have them develop wisdom through experience. But talent is innate. They're born with it.

And you need to identify people who have that talent and apply them to the different tracks for succession planning. Now, experience is interesting because experience influences skills and it influences knowledge. But experience is simply time and exposure in the role that you're looking to achieve in the future.

So if you're applying the experience threshold to somebody who's ready to become a department head, if they've been a supervisor in that department for a year, there's a pretty good chance that they've seen everything, 90% of everything there is to see in that department. They've seen it. So the experience that they've gained from a skills and knowledge standpoint is adequate because the experience has taught them the skills and knowledge.

Now, to be the CEO of the company, have they experienced everything that they need to experience in order to be successful there? No. So they need more time in role. They need more experience in order to be successful in the CEO role.

So what we want to do is we want to take leadership, management, and individual contributors, and we want to look at these four competencies as it relates to each of them. So let's start with individual contributors. You're in a biopharma company.

You're in a biological pharmaceutical company. And you need to generate new products constantly. You're going to need to find people who have the innate ability to think about things with a bias for science.

And you're going to need to make sure that they have enough experience to understand what it's like to work in an environment that's just like yours. So you're going to measure their innate ability either using a psychometric assessment or using behavioral interviewing skills. And you're going to understand what their talent is because that's what innate ability is.

And if they have talent that matches the talent of the people who are the best in your company in that role, then you're on to something. So then you want to look for people who have experience doing what you're looking for them to do because that will tell you whether or not they've developed the skills and knowledge necessary to be competent at the job. You may even want to go so far as to give them a little bit of a quiz or have them shadow somebody for an hour or two and then get the person their shadowing's opinion so that you know if they have the skills and knowledge necessary.

So this individual contributor who's a research and development person will show you through their actions and through their activity, they will show you whether they have what it takes to be a great research scientist for your company. And that's how you handle the individual contributor track. The next track up is the management track.

And management is all about making the trains run on time. It's all about logistics and administrative tasks. So when you're looking for an ability for a manager, you're going to point your psychometric assessment or your behavioral interviewing questions will be focused on sharing experiences, having the candidate share experiences that they've had over the years in roles similar to the role that they're applying for.

And that will be a window into how they handle the types of situations that will come up on the job at your company. So from a management perspective, we want to make sure that they can do the tasks, the administrative tasks, the logistical tasks that are required. Then the final step on the succession ladder is leadership.

Do the people you're interviewing for leadership roles have the ability to engage, encourage, and inspire the people with whom they will be working in the future? That's skills and knowledge, but it's also innate ability. It's also talent. You can give them a psychometric assessment so that you can rate their ability, their innate ability, their talent, and then you can assess their skills and knowledge by testing them, by asking them behavioral-oriented interviewing questions, and by having them demonstrate some leadership style that they've applied in the past.

So your goal in succession planning is to break down every role in your company into a leadership role, a management role, or an individual contributor role, and then you want to look at the skills, the knowledge, the talent, and the experience that are necessary in order for someone to be an A player in all three of those areas. That's your basic introduction to succession planning. I am Dave Lorenzo.

I'm the Godfather of Growth. We will be back here again tomorrow with another great edition of our show. I'll see you tomorrow at 6 a.m.