Efficient role distribution and thorough succession planning are the basis of organisational progress.
In Africa, the need for a formal plan on leadership structure and transition has been exacerbated by a large number of family businesses where such procedures are often overlooked and the same staff simultaneously holds multiple positions.
According to a recent article, about 76% of African family businesses have no succession plans and 19% of them even deliberately decided against such plans. Similarly, 50% of Nigerian family businesses had no governance policies, yet 70% of them and 63% of African family businesses considered sustainability to be the key driver of growth which is understandably hindered by the above fact.
To help local businesses match their development pace with growth expectations, below are 3 key strategies on business partnerships and succession planning.
1. Set Up a Framework for Corporate Governance
Business roles in some organisations are often mixed leading, to the lack of understanding of individual responsibilities. Thus, non-executive directors can be involved in corporate management and lose their major focus on independent supervision, while shareholders have an upper hand in decision-making.
A clearly established corporate governance structure will help put the management, board and all other key internal stakeholders in their rightful places, as well as adhere to an impartial governance process.
2. Implement In-House Managerial Training Programs
Many organisations experience a shortage of qualified cadres to take the reins of corporate development if the CEO or other foundational leader suddenly resigns or retires. Oftentimes, it is notorious for family businesses where positions are distributed on kinship instead of merit. Purposefully designed managerial training programs can fill the void of leadership skills and prepare reliable successors for the leadership positions.
3. Adopt the Partnership Policy and Guidelines
The status of a Partner is often vague in partnership-based businesses. Sometimes Partners even play the roles of Founders, Managers and Employees of other levels. It is important to define the actual place of a Partner in the organisational chart, design the criteria of admission and appraisal for Partners, as well as create incentives for regular staff to aspire to the Partner rank. As an example, there can be an equity scheme that encourages regular employees to upgrade their status in exchange to an equity stake in limited liability companies
It’s important to stress the need to always follow legal frameworks, such as dispute resolution procedures, for sufficient accountability and transparency of the corporate affairs.
