Often, organization founders and owners try to resolve their succession dilemmas by looking for an offspring or young protégé to enter the business and gradually take it over. If this isn’t feasible, an alternate solution to consider is to develop the current management group into a more self-managed team. Working effectively together, your current managers may be able to run your business fairly autonomously, giving you more freedom and long-term security.

That is precisely what another pair of owner-managers found after developing their family business into a more self-managed organization. They were then able to take off three months a year, every year, leaving their business in the capable and trusted hands of their top team. With a more self-directed team at the top, these owners also observed greater productivity, innovation and commitment in their managers, with an increased likelihood of management decisions being effectively implemented.

Nevertheless, the shift from a traditional hierarchical organization into a self-directed management team is not simple, nor always easy. Proper planning, preparation and education are needed to make self-directed top teams successful.

Typically, four conditions need to exist for their success:

1. Top-team members must have sufficient competency and commitment to manage their greater independence and increased responsibility.
2. The team must have access to important and relevant company information in order to better plan and make sound decisions.
3. Owners and management-team members must have tolerance for errors and not blame each other for mistakes as they learn to improve themselves.
4. Trust must exist, both within the top team and between that team and owners, if the team is to take risks, openly share information, and be ready and willing to accept change.

Without belief in the capability of your current managers, and trust in them, you should not attempt this strategy. However, if your key people show potential and you trust them, then you owe them the possibility of taking a turn at the helm of your business.

Once the above four conditions are met, concentrate on the following supportive steps:

1. Make sure that top-team members understand and commit to the organization's vision and mission.
2. Properly define and staff management positions so that appropriate managers are in relevant positions.
3. Help the team define appropriate and achievable performance goals and action plans as the basis for their collaborative work.
4. Create a system of measuring and communicating organization performance results so that the management team can monitor, learn from, and improve those results.
5. Install an appropriate top-team appraisal and reward system to evaluate and reinforce solid team performance.

For the top team to have proper incentives, an augmented performance management system should appraise and compensate not only individual manager performance but also the top team's collective results. When team incentives for group and company accomplishments are properly
combined with individual incentives for leadership and teaming capabilities, there is heightened collaboration and decreased competition among managers.

The shift from a traditional organizational hierarchy to a self-directed top team can be complicated. As with any major organizational change, it is extremely important to prepare for and think through the implications of this change before implementation. Ongoing communication and follow-through by owners helps ensure a successful transition to new top-team thinking and action. Evolutionary changes, rather than fast, revolutionary ones usually yield greater success.

The move to self-directed top teaming can be worth the investment. Making wise and mindful changes can enhance the management talent that you already have within your company, create new highs in your company's performance, and offer—the company owner peace of mind about the continuity of the business.


Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .