If you care about the future of your business, it’s never too early to invest in a succession strategy, says Bill Goodenough
Succession planning is an organisational development issue that often remains unanswered in the design industry.
Given the size of most design consultancies, they are probably too busy servicing clients to plan for their future management needs. It is also an uncomfortable issue for many senior teams, an issue easier left alone. Yet, early succession planning is vital – any fee-earner or shareholder may need to be replaced, for whatever reason, and events like this can have profound and disruptive effects on your business and employees, and therefore their partners, families and other dependents.
This is true for any business, but what does it mean for the design industry in particular? In many cases, creative businesses are led and built up by figureheads who remain central to those consultancies’ reputations, credentials and client relationships. This is good for the individuals involved, but it can cause problems when it comes to growth and succession.
Design Bridge, 21 years old this year and still independent, introduced a line-management system to plan for the future – an industry first – on the day it started trading.
In those early days, it was decided that the business was to be developed beyond the tenure of the founders, and a financial structure was put in place to enable this. Individuals were able to buy equity in the consultancy, through issued shares, from the beginning. Although a private business, this meant auditing and valuing the shares, just like any public company. This was the case, first in London and later, when subsidiaries were started up in Holland and Singapore, where local ownership is still encouraged through share ownership.
At the heart of this business approach are shareholders who agree to have ‘a smaller slice of a bigger pie’, permitting growth which offers staff genuine careers. This throws up the challenges of line management, such as mentoring, training and personal development, as people begin on the lower rungs in their ‘youth’ and move up the career ladder. This requires a shared understanding and acceptance of the values of the company, as managers need to nurture the same values in their teams.
Taking a generation as being between ten and 15 years, Design Bridge is now already on its third. Of the original founders, four are still at the helm. The London, Amsterdam and Singapore partnerships – and lately the Healthy Marketing Team – consist largely of directors and shareholders that were not there at the outset. The commonality between them is that they share the same values, the most important being ‘mutual trust’ – without that, you are hampered by the symptoms of all guru-led businesses. This means that we can just ‘get on with the work’, because the consultancy is always more important than any individual, including senior executives. This goes back to the beginning of Design Bridge, when the founders chose not to have their names above the door.
It is a logical way of doing business, but not the easiest one. It means placing a lot of confidence in people – so you need sound judgment. It goes right back to line-management basics such as financial structure, shared responsibility, discipline, integrity, putting the consultancy first, offering people genuine careers and having the confidence to live up to this ideal. Line management isn’t actually terribly well understood in business – it takes confidence for the individuals concerned to decide and agree on strengths and weaknesses, then letting the best people for each job get on with it, whether it concerns leadership, creative design, personnel, finance or strategy.
As for the dilemma – to plan for succession or not – there is no right or wrong answer. In the final analysis, the growth of the equity in your business is just as much about the competency and the long-term commitment of your people as it is about finance.
No matter what size or how successful the business, if key players leave – either by choice or circumstance – it can easily cause a crisis. So, it pays to invest in people from the outset, allow them to flourish, develop and reach their full potential. None of this is, as they say, rocket science, but actually having the commitment to realise the vision really does require the long-term view to remain front of mind.
Bill Goodenough is group executive chairman of Design Bridge
Looking to the future
• Decide from the outset where you want the business to be in five or ten years’ time
• Implement line-management systems and financial structures
• Build your business on mutual trust and integrity
• People are you greatest asset, invest in them
• Stick to your guns