How much do you know about succession planning?
I often get asked many questions about this topic.
“When should I begin?”
“How do I implement it?”
“How do I find the right people?”
Many business owners have no idea how much it can strengthen their existing business by starting a succession planning strategy early, before they are ready to hand over the reins.
Preparing your business for a future sale or buyout can also be a key component in cementing a solid foundational framework, building and maintaining a healthy relationship with the team by inspiring loyalty, trust, commitment and developing a diverse and inclusive culture.
Far too often, I see business owners waiting until they’re ready to close the doors or when they’re burnt out, and not thinking rationally, before they look at succession planning opportunities.
These traditional approaches often aren’t effective in an industry that is evolving rapidly and which demands forward-thinking strategies.
By thinking outside the square, real estate principals can generate more opportunities and secure their future before it becomes a challenge to do so.
Here are some ideas for developing an effective succession plan in real estate that will maximise the chances of success and create a whole new dynamic within your business.
Build a pipeline
Building a strong talent pipeline should start long before a transition is necessary.
Identify high-potential employees early in their careers and invest in their development.
Offer mentorship programs, leadership training, and cross-departmental experience to groom these team members for future leadership roles.
This proactive approach ensures a pool of qualified employees ready to step up when the time comes.
It will also help you retain your best team as they will appreciate the opportunities you grant them, as well as the chance for learning and growth within the business.
Use technology
Using technology to facilitate a seamless knowledge transfer between current leaders and potential successors is a great way to increase the level of understanding and trust when a new partner or owner comes in.
Create a digital repository of best practices, client databases and operational procedures.
You can create video tutorials, webinars, and recorded virtual meetings to document and share valuable insights and information.
This not only preserves institutional knowledge, but also makes it easily accessible for future leaders.
Leadership program
Introducing a rotational leadership program, where potential successors experience different roles within the business, is another great way to gain more insight with a hands-on approach.
This provides them with a comprehensive understanding of the business and exposes them to various challenges, with opportunities to find solutions.
Rotational programs can develop well-rounded leaders who are prepared to handle the multifaceted nature of running a real estate business – or it will reveal any shortcomings.
This also gives you the ability to gauge their adaptability and suitability for a place in your succession plan moving forward.
Cultural connection
Encouraging a culture that values innovation and continuous improvement is the opening for creativity, a space where employees can propose new ideas and solutions.
Support these initiatives with resources and recognition.
A culture of innovation attracts forward-thinking people and prepares the business to adapt to changes, ensuring a smoother transition during a buyout or sale.
Onboard the right way
When a successor is identified, develop a tailored onboarding process that includes both formal training and hands-on experience.
This might involve shadowing current leaders, participating in strategic planning sessions, and gradually taking on more responsibilities.
A thorough onboarding process ensures the successor is well-prepared and confident in their new role.
Emotional Intelligence
In addition to technical knowledge and industry expertise, ensuring emotional intelligence and communication skills in your succession planning is essential.
Leaders with strong interpersonal skills can effectively manage teams, build client relationships, and navigate conflicts.
Offer training and development opportunities focused on communication, empathy, connection and leadership.
Leadership diversity
Diversity in leadership brings varied perspectives and innovative solutions.
Ensure your succession planning process is inclusive and considers candidates from diverse backgrounds.
This enhances the overall ability to address a wide range of client needs and market opportunities within the business, which will help leverage your exposure and increase the attraction of your business.
Transparency is critical
Transparency is key to successful succession planning.
Clearly communicate the succession plan to all contenders, including employees and current business partners.
This transparency builds trust and reduces uncertainty, ensuring a smoother transition.
Regular updates on the progress of the plan can also keep everyone informed and engaged.
It’s an ongoing process
Succession planning is not a one-time event but an ongoing process.
Regularly review and adjust the plan based on feedback and changing circumstances.
Conduct periodic assessments to ensure potential successors are on track and make adjustments as needed.
Flexibility and responsiveness are crucial to the plan’s success.
Innovative succession planning is a worthwhile and valuable investment to make in your business.
By thinking outside the square and implementing these strategies early, business owners can ensure a smooth transition out when the time comes, while benefiting from having built a strong business framework that has been lucrative and will be sustainable and consistent for the future.
Growing a team of loyal, well rounded employees through early talent development is the key to successful succession planning.
Embracing these approaches will not only secure the future of the business, but also position it for continued growth and prosperity before, during and after your exit strategy is implemented.
