There are many factors that go into a successful management succession transaction, but the key ingredient is undoubtedly getting the right team of people. Whilst it takes time and careful planning to build the right team to drive a business forward, there are certain characteristics which a strong management team should demonstrate.
P is for Passion
Passion and commitment should be evident to inspire confidence in stakeholders, suppliers and customers as well as potential investors. The management team needs to show they are passionate about driving the business forward, can solve problems together and have a ‘whatever it takes’ attitude when it comes to making difficult decisions.
E is for Experience
Experience and market knowledge are a must. Ideally the management team will have a good balance of technical, commercial and financial expertise.
Don’t be afraid to bring in new people to complement the management team’s experience and knowledge. It can be more effective to bring in someone with specialist knowledge than try to upskill an existing member of staff.
Non-executive directors can bring the additional experience and expertise to take the business to the next level of growth.
O is for Openness
Honesty, integrity and trust are vital. Don’t be afraid to identify weaknesses and potential risks in the business and put a plan together to improve governance and management information to address any issues.
P is for Performance
The management team should understand the business’ financial performance and what drives profits. An ability to demonstrate a track record of high performance and an understanding of basic financial information are essential especially for non-financial personnel.
L is for Leadership
When planning for succession a good leader who, up to this point, has set the vision and strategy for growth should know when to take a step back and delegate key responsibilities to other management team members.
E is for Entrepreneurship
Entrepreneurial spirit is the final key ingredient of the strong management team. The management team should be able to spot new opportunities, be better than the competition, anticipate and respond to market changes and be capable of driving change and innovation in the business.
Finance Wales has a range of funding for small and medium-sized businesses including a specialist £25 million fund, The Wales Succession Management Fund to help Welsh managers and management teams buy established Welsh small and medium-sized businesses (SMEs).
To find out more about how we can help contact us.