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Exit Planning and Succession VI - Developing Talent

Editor's Note: Succession planning is a critical element of exiting a business. For detailed guidance on developing a succession plan, see the fifth article in Glass Magazine’s six-part Exit Planning & Succession Series, “Nine Key Considerations for Successful Succession Planning”.

Search this website for "exit planning", to see all articles from this series.

Salem Distributing Co.,, is a 100 percent employee-owned company, via an Employee Stock Ownership Plan, or ESOP. Mike Willard, pictured left of center, has committed to in-depth training to develop better leaders of the 70-employee company. Photo by Vanessa Picciano.

Education and training are a key focus for many glass industry companies as they work to maintain busy schedules amid veteran retirements and an untapped younger generation. As company leaders implement their exit plans, securing capable business successors is necessary, but often difficult. Often the next CEO or owner is in-house, but unprepared for the position due to underdeveloped talent.

To combat unsettling succession concerns, management of Salem Distributing Co. rolled out a Leadership Development Training initiative in fall 2015 to develop specially selected employees to potentially fill key positions in the future. The 100 percent employee-owned company committed to planning ahead, spending time and money, to properly train and prepare its employee/owners for enhanced positions.

“While we are just implementing a succession plan at Salem, our goal is to direct talent development at multiple levels of the company to create a deep pool of people with skills and knowledge to become effective leaders,” says Mike Willard, CEO of Salem.

With the help of Praxis Consulting Group of Philadelphia, Willard has developed a step-by-step training and development process that has helped him pinpoint and develop specific traits for leadership positions within the company.

“Companies start replacement plans when they know someone is close to retirement. But it’s the unexpected moves that keep me awake at night,” says Willard. “Not having a succession plan in place is a setback to the organization. It’s an impact on the bottom line.”

This article outlines Salem’s Leadership Development Training and its impact on the organization.

Leadership development step-by-step

Planning for Salem’s Leadership Development Training began in fourth quarter 2015, when Willard completed a Clark Wilson 360 Leadership Practices Survey, and received feedback via the survey from 12 different people, including all his direct reports and a few of his industry peers. The survey was followed by debrief with a Praxis consultant. Next, the consultants individually interviewed Salem’s identified strategic team of seven upper-level managers, who had been selected two years prior as part of a five-year growth plan. The interviews solidified the role of each manager and the training topics that the team needed in order to improve upon their overall effectiveness, according to Willard.

Training for the strategic team kicked off in February 2016. How the strategic team interacted in a previous session helped to solidify the content for the next session, according to Willard.

Kick-off session:

  • Building self-awareness for leadership
  • Knowing and understanding personal leadership style
  • Understanding active listening
  • Giving and receiving feedback.

Willard says these initial topics built trust among the group. The strategic team learned how they each exhibit their leadership styles within the organization. “Giving and receiving feedback was a particularly good [topic] as we are sometimes hesitant to approach a peer and share feedback, good or bad. We just don’t do it often enough and the session did a great job knocking down the barrier to do this.”

Between the February and March meetings, direct reports, peers and supervisors completed The Clark Wilson 360 Leadership Practices Surveys for each member of the strategic team.

“Generally speaking, every team member received feedback from about ten people, which gave them a clear understanding as to how they are perceived within the organization,” says Willard.

Second session:

  • Completing 360 assessments
  • Reading and understanding results via 360 webinar
  • Debriefing individual assessments with Praxis coach, manager and CEO.

The 80-question survey assessed how each strategic team employee responds in various situations. It ultimately drills down two topics:

  • Core management strengths
  • Core developmental challenges

Willard says there were plenty of surprises based on the results of the surveys. “You’re exposing yourself to everyone [through the survey], and the feedback could be blunt,” he says. The biggest takeaway from the assessment, according to Willard, was understanding that everyone has blind spots, behaviors you don’t know about yourself but others perceive.

Common themes surfaced based upon the feedback of the surveys, and the remainder of the training was built to suit.

Third session:

  • Sharing highlights from the 360 assessment with the group
  • Active listening, how can you improve?
  • Asking effective questions
  • Managing defensive communication
  • Developing SMART professional developmental goals.

Since beginning the Leadership Development Training at Salem, Willard has noted more awareness of areas for self-improvement, and an effort to improve.

Final session:

  • Developing others in an ownership culture
  • Practicing delegation
  • Checking SMART goal progress
  • Practicing conflict resolution
  • Sustaining development of professional goals.

“This is not easy stuff,” Willard says. “You have to actively commit and think how you will go about making these changes and follow through. When you’ve done things the same way all your life, it takes much commitment to relearn something to improve yourself.”

While the development training is intended to develop talent for the purpose of building company successors, it also improves the functionality of the company long before any personnel changes happen.

Leadership development into the future

Next, Willard and Salem’s management team plan to roll out a similar training process for the rest of the organization. “Being a mid-sized company of 70 employees, we haven’t had much external training, and, let’s face it, we all need additional training to improve our hard and soft skills.”

Positions at all levels and areas of the company can benefit, particularly, as Willard notes, in terms of giving and receiving feedback. “[This] will improve communication throughout the organization. [It is] how highly effective teams operate.”

While intended for succession preparation, Salem’s Leadership Development Training has sparked appreciation for job training in general. Willard says, “Moving forward, we’ll increase our annual budget for training not only for the management team but for the company as a whole … The long-term payoff will only help the company.”

Overview of Salem’s Leadership Development Training

1 Identify critical positions for succession planning.

Roles of CEO and other high-level executives: “I’m just 55 so I’ve got a long runway ahead of me, but it’s never too early to start planning for my replacement, and that’s exactly what I intend to do,” says Mike Willard, CEO of Salem Distributing Co. “The goal is to hire from within, but if needed, we will certainly go outside if we haven’t cultivated the right successor.”

Roles throughout the organization chart that could cause “significant pain”: “As a rule of thumb, we will create a succession plan for every position that would cause ‘significant pain’ to the organization if that position were vacated unexpectedly.”

2 Assess and identify potential successors within the organization.

“As we identify high potentials, we’re not promising a promotion to the next level but simply advising them that we recognize their potential and we are investing in their development to prepare them for future positions,” says Willard.

After identifying seven people for its strategic team and working with them through leadership development, Salem officials will provide specific development plans and opportunities for the employee/owner with regular check-ups throughout the year.

“In the end, we will treat all succession plans as a living document and make frequent changes as needed,” he says.

3 Develop employees’ hard and soft skills.

Hard skills: Doing current job better with an eye on other jobs where there’s a void or with a possible need in the future.

Soft skills: Giving and receiving feedback, having crucial conversations, resolving conflict, managing performance, building relationships, leading situationally and thinking critically.