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Hello, my name is Tanya Williams. I am a financial educator with MSU Federal Credit Union. My pronouns are she and her, and welcome to the last step of our three part series with entrepreneurship. And this is entrepreneurship phase three, Succession planning. What we're going to be talking about today is we're going to talk about planning for success, long term planning, hiring and training, and the benefits of succession planning. Let's drop into succession planning one oh one. What is it? Succession planning is a business strategy to pass down leadership roles to an employee or a group of employees. In this three part series, we have covered start up growth basics and succession planning. Here, succession planning is going to be for our businesses who have had exponential growth throughout the years. Maybe throughout the entire state, maybe they're throughout the entire country. But whatever it's looking like, this is ultimately means we have a very well established business, we have a good rhythm. We have been running into such success, this business might ultimately be passed on to a next generation, or somebody might not have to. But somebody might retire and now lead the business, leaving the business to be led by others. And why this allows a company to run smoothly after employees leave retire or pass away. L I do believe in the first series that we had together, I talked about being able to have a business plan. Ultimately, if you leave, somebody should be able to open a book and be able to run your business based upon all the information that you left, including processes and operations, right? Succession planning is essentially that. A little more heart to it. What types of succession planning do we have? Plans can be long term to account for future changes or unexpected emergencies. We've got long term and also short term. But at the end of the day it is going to be for changes. When we're talking about the commitment of succession planning, this is going to be super important, time allocation, We want to be intentional with what we're doing. And because there's going to be a lot of intentionality to this, this process could take anywhere 12-36 months. It's going to have a host of factors of why it could take 12-36 primarily size and also the business itself. How in depth do we have to get? What kind of processes are we looking at? Are we not only talking about processes of how we contact our sales team? Do we have a sales team? Are we looking at how we create our product? Are we looking at how we deliver our services? Right, The timeline involves a lot of different factors. We want to first make sure that we're being very intentional about what we're doing. The other thing is, when we're talking about our succession plan, we want to make sure we're reviewing this yearly, once this gets in place, right? Whether that takes 12 to 36 months, once you have this succession plan, we want to make sure that we're reviewing it yearly. Because things change very quickly, a lot can change within a year. Time allocation when it comes to succession planning happens because of commitment to leadership evaluations. As you'll see when we move forward, it's going to be important to understand who will be your next leaders. How do we determine that? One of those things would be an evaluation. Maybe your evaluations already take into account the thought process behind leadership and maybe it doesn't. If it doesn't, not only do we have to commit to doing the leadership evaluations, but now we have to commit to creating evaluations that account leadership. This is why that time allocation could be a little bit more lengthier. Because maybe you have to add, add an additional step to a process that's already there. Now we have to think through the process of what does adding this step now look like. The other thing when it comes to time allocation is identifying replacement. Yes, we must evaluate people. Right? Now that we've evaluated people, we have to identify who the replacements will be, maybe based upon that evaluation, right? And then you have to train your successors. This means. Time. Maybe it's something that they're very familiar with, maybe it's something that's new to them, right? This ultimately means time training, time. We're going to talk a little bit more in depth about training. In depth about training and what that looks like, but ultimately, that does take time as well. Who is responsible for planning succession? Well, that depends on your business. I know that it might not seem the greatest thing to say all the time, but it's true. Each individual is different and each business is different. Therefore, a lot of these things are going to have a level of, it's going to have a level of gray area here, right? Because it could be all over the board. Because of the organization that we're talking about, whose responsibility is it? Well, it depends on the size of your business. So a vast majority of times large organizations will have board members who will do the succession planning and what that looks like for their business. Maybe it's CEO's or maybe it's mid level employees. So that could be your board, anywhere from a regional manager versus a local manager, right? So that's kind of your mid level employee range. And then if you're a small business and it might be you as the owner who does the succession planning, it could be you with your children. If you're the owner and this business is going to be passed on to your children or their children, then maybe they get brought into the succession planning as well, because ultimately they're going to take it over. And therefore, they might see needs or things for the future that you might not necessarily see as well. We can also add our children under our small business. If you're a small business and it's just going to be you, the owner that is going to be doing the majority of succession planning. In succession planning, one of one area that you could ultimately start at without ever writing anything on paper is proper hiring. The goal is to hire candidates that will fulfill future openings by rising through the ranks. I will say that is one thing I do love hear about the credit union. There are a lot of stories of our leadership who have risen through the ranks here at the credit union. When you're starting to do succession planning, outside of having your notes on paper or in your computer, it's really important to start thinking maybe what could be considered ground level in hiring, right? Maybe people that you hire might not necessarily have the skill sets needed to instantly fill a role of leadership. But that doesn't mean that they don't have qualities and characteristics of leadership that they could then move forward with the next process which is training. Right? If you're hiring people that have the ability to be trained, then you are already starting to set yourself up for success with succession planning. Because we're starting at that ground level. The next step is training. The goal is to train current employees by developing skills, company knowledge, earning certificates, and cross training in other areas. This one, I think out of this presentation is one of my favorites because again, we started that, that last slide of proper hiring, right? Maybe that person might not have the skills that they need, but they're willing to develop the skill sets that will allow them to be part of that succession plan. The other thing is to maybe you currently have employees who have great skill sets and especially within their area, but maybe they might not necessarily know the company knowledge yet. Maybe they have a little grasp of the company knowledge, but there's more deeper information that they should know in order to be a leader for the succession planning. Right, then we're going to talk about earning certificates. Now sometimes businesses on their own require certifications, which we've discussed in our earlier series, Phase One, Start Up. But employees themselves might need certifications in order to move forward as leaders. Now if we've gone through our employee evaluations and we have identified who could fill some of these roles for our succession planning, then now is the time to not only make sure that they're developing the skills and that they know that company information and knowledge, but now it's time to get them earning certificates. Again, we're talking about time line, right? Time allocation was 12 to 36 months and part of that could be earning certificates. Maybe it's through a company in which they're not hosting another program for six months. Now we have just utilized six months of our, let's say, 12 month timeline, just in waiting alone. During this time, you could be cross training your employees in other areas of the company. That again, helps to lend to company knowledge from there. Now we hit that six month point and they can go to a weekend seminar, a weekend retreat, whatever it may be, and they could be earning that certificate within that weekend. Right. The other thing to consider too is maybe it's not that they actually have to wait to go to get the certification, maybe it's just a six month course. In general to get the certification. Right now, we still have six months of our 12 month timeline being eaten up by going through a certification process. Now that doesn't mean that we have to put the brakes on developing more skills or company knowledge or even cross training. But the question is is what is the certification requiring? Right? One of the other things we want to make sure we're talking about is making sure that there is a little bit balance there for the process of succession planning. And making sure that while there might be a heavier load in a leadership position, at the same time we want to make sure that we're seeing our people succeed. So can we cross train our employee or somebody who's going to be stepping into that leadership role while they're going through a certification process. Right? So these are some of the things that we will be considering or should be considering as we're moving forward with succession planning. So now that we know what it is and some of the areas that we can really utilize to our advantage, what are some of the common mistakes when it comes to succession planning? Well, failure to communicate. Every time I say that, I hear a movie quote in my head, and I can never remember what movie it's from. But I think I do, but I'm not sure. But a failure to communicate, right, One of the common mistakes in succession planning is where our leadership can't communicate the vision that they have with the employees. This doesn't just mean our leadership at the top who's doing the succession planning, but also this means our leadership in general, right? We want to make sure that we can communicate the vision that we are trying to achieve, not only as a company, but for succession planning. And when we can't communicate that, then it makes it difficult for people to believe in what we're doing. Additionally, we want to make sure that our employees can also communicate the vision, because they will ultimately have to pass this on to those that they're leading. But those that they're leading should also be able to communicate the vision for our overall organization. Because at the end of the day, they are a representation of your business. And they could be telling friends, they could be telling family, they could be telling the stranger at the supermarket about where they're working and what that means for your business and what that means to them as employees. And what that vision is, one of the common mistakes is making sure. One of the common mistakes of succession planning is not being able to communicate the vision for the business. In addition, the vision for the succession. Right. The next failure to communicate is neglecting a strategy. Oh, yes. Right. A strategy is really going to be an agreement is essentially what it is. Right. We want to make sure that we are adopting an agreement that people can understand and that is part of strategizing. When we're giving information to the people around us, then that helps for them to one circle back to communication. But two, it tells us that we are forward thinking, right? And if you're not adopting a formal agreement or a plan including a short list of candidates and conducting regular interviews of positions and employees, then we are completely neglecting our strategy. Right. I think it's important to circle back to the evaluations that we've talked about before when it comes to succession planning. Part of those evaluations are part of the strategy. We can take the evaluations and conduct the interviews for a short list of candidates as part of the overall strategy for succession planning. Another mistake is making assumptions. This can quickly turn into a roadblock. To succession planning because one, if you haven't been doing evaluations that's operating under assumptions of your employees that they know what they're doing or that they're proficient in what they're doing. And if we're not doing that follow up piece, then we really have no idea where to start looking for our successors, right? But also we can have people make assumptions to assume that, that their talent or your employees have the skills and knowledge to advance and succeed. And that's not necessarily always the case, right? That is where our evaluations come in, come in, and are very helpful. But also here's the other thing, one that I think is really important to cover here is making assumptions that people want to be promoted, right? I say that because I too, as an entrepreneur and somebody who tends to see the best in people and tends to see the great job that people do. And the people around me, my head instantly goes to this person would be amazing as a manager or this person would be amazing in a leadership position. But that doesn't actually mean that's what they want. If we are evaluating people, the ability under the assumption that they want leadership or they want succession, or they want promotion and they don't. We could be losing a lot of valuable time with somebody else and seeing those things in someone else. One never assume that the people that you work with have the skills and knowledge to succeed in advance. But two, let's not assume that they want those things anyway. This is where having a really good pulse point on your employees, having a lot of effective conversations can help you really a lot of valuable time. But if somebody says that's not something that they want at this moment, that doesn't mean that it's not something that they don't want in the future too. I guess you could call it your Ace up your sleeve or your Ace in your back pocket. But if somebody says it's not something they're looking for, I would also just encourage you to remember to circle back and revisit that person. Because things change, right? And it's something that maybe they will want in the future. Then a failure to plan. Failure to plan. There is a wonderful que, that is failure to plan is planning to fail. I never remember who says this, but I do believe there is some truth to that as well. If we fail to plan for succession planning for all employees, then this could lead to a failure during that time of transition. When we talk about succession planning, this doesn't just mean for the big top people of our business. This also means for people as low as the guy that delivers the items, right, we want to make sure that we are succession planning for all positions. And the thing that's really cool about this is it doesn't necessarily mean that it has to be over the top and in depth when we're doing the succession planning, right? This could be, it's ultimately employee turnover. And maybe employee turnover has been difficult. And that might be because we don't have a plan on what it looks like to bring people back to our doorstep. At, at the lowest level of our businesses, we want to just make sure that we are planning for all positions and all employees. Then one of the last common mistakes is a lack of diversity. When we're talking about diversity, we're talking about diversity within our talent pool. What this really means is a lack of diversity within those lived experiences and of the people we're bringing in. A great example could be, especially if you're here in this great state of Michigan, maybe we're finding our talent pool as close to home as possible. Maybe it's within the city, maybe it's within a couple of different counties away. But you might get some amazing ideas, amazing concepts that could be a huge aid to your business. If you diversify your talent pool and bring in more people with different levels of education, different levels of life experience, background history, where they grew up, all these different things, right? This tends to give us a refreshing look at our businesses that could ultimately be very helpful for us are now that we talked about the mistakes or some of the common mistakes. What are the benefits of succession planning? There's increased employee satisfaction because they know that there is a potential for advancement and moving forward with different opportunities. Right, we also see Benefit as it reinforces career development. If people know that there's the potential for them to move forward and to advance into a career for the long term, then this really encourages them to have career development. And that could mean learning skills that are valuable and pertaining to the business. But this could also mean learning skills that are valuable, that have nothing to do with the business, but yet can somehow still be brought back to your business. Just knowing that there is the ability to advance that can bring career development. Just knowing that there are more opportunities. Also, this creates mentoring opportunities. One of the things that I loved about working at the credit union when I first started is that I started in the call center. And being part of the call center was fantastic. But what really got me excited was when I was given the official title of being a call center mentor. And what this meant was, I mean, I knew my stuff and I was great at everything that I did. To some degree. I think we all have room for improvement, right? But I was allowed to help other new call center people and help them by asking them questions, being there as a level of support and sharing with them some of the things that I did to help make my day easier, right, When we know that there's room for growth, room for advancement. This also leads to a commitment to succession planning by mentoring and passing on knowledge and skills which we know might be needed for those to grow into that leadership role. Then we also supports internal advancement. Succession planning circles right back up to the employee satisfaction because there's advancement opportunities. And succession planning supports the internal advancement because we know that we're going to be keeping our eyes on our employees. We're going to have those evaluations. This is going to help give them more career development, to keep them excited and engaged at work, right? All of these things actually tie together to help with succession planning and to help foster a positive company or business atmosphere as well. Then it also helps commit to the mission. Leaders and employees are better able to share the company's values, vision, and mission because they're more invested. Knowing that there is room for, for career development and for internal opportunities, that leads them to lean more into the values, vision, and mission of your business. Then it identifies opportunities, it disputes mistakes and errors. One of the things that succession planning does is not only does it identify opportunities for your employees, but additionally, it helps to dispute mistakes and errors when, when you're going through the process of succession planning, and we are looking at those steps to bring leaders to that next level, to replace somebody, we might find some mistakes that we didn't realize were there. We might find some errors that we didn't realize were there. These errors and mistakes are also opportunities to help move that business forward, even as we're in a place of transition. It may also help for that business to recognize a change that might need to be made within policies and procedures, ultimately again, moving that business forward. When we talk about succession planning, as we stated before, it's a lengthy process that can take 12 to 36 months, depending on that organization. There might be some pitfalls that happen. There might be a few obstacles along the way. And also it does take that brain power and energy. But at the end of the day, there is plenty of benefits to succession planning that can help keep your business that you started. Maybe you've inherited the business, but it's going to help keep that business together and moving forward as we move through that transition to a different season of life. Lastly, we want to make sure that you are here with us at MSU Federal Credit Union. And we do have resources for you. We have our business solutions department and they can help you with your business accounts, your business loans and business services which include merchant processing, deposit, payroll solutions, and fraud protection, which is very important. And then we also have additional offers. Our members do have a Turbotax discount as well. Then lastly, we have our wallet watch podcasts where there are so many episodes and different topics to help keep you learning and moving forward financially with financial information and knowledge. We also have our financial education series. This is our financial education series. For seminar series, this is our adult financial education program at the Credit Union. Everyone is welcome to join even people who are non members. You can sign up at any time, register events, and then also you can catch playbacks on our Youtube channel as well. We have our Financial 4.0 This is geared towards our college age students. A lot of cool stuff on there from ask an educator to our calculators. We have blog posts that give a lot of information. We also have quizzes to help them see where they're at and how they best understand finances. Then lastly, we have our desk drawer fund. Our desk drawer fund is based upon the five pillars that we do hold dear. And that is arts and culture stable housing, empowering youth, financial education, and fostering entrepreneurialism. This is something that you can donate to. That donation is always tax deductible. There are a lot of additional resources for you when it comes to partnering with MSU FU. I want to say thank you so much for being a part of this limited series and this was phase three succession planning. My name is Tanya Williams for MSU Federal Credit Union. I'm a financial educator here. Thank you so much.