Social Enterprise Day 2012 – Social Enterprise and Succession Planning
All businesses need to think about how they plan for the future and social enterprises are no different writes Glenn Bowen, Project Director of the Social Enterprise Support Project at the Wales Co-operative Centre.
It is common for social enterprises to be driven by the founding members who shape the culture, ethos and strategic direction of the business. These individuals usually have a long term commitment to the business and often spend their professional working lives involved in the business. In terms of business continuity and knowledge retention this is a very positive thing and only becomes a problem when that individual leaves the business.
A good social entrepreneur will understand the importance of legacy and will invest time and energy in selling the vision and culture of the business to all stakeholders including employees, Board members and members. Setting these firm foundations will mean that the business will not end or falter when the founding members leave but grow and flourish. Founding members who feel positive about sharing the ownership, control and culture of the business with a wider group of stakeholders are more likely to be able to look back historically and say “I was there when it all started”, as opposed seeing the business fail on his or her departure.
Good governance is not just about ensuring social enterprises operate effectively and efficiently within the current market it’s also about ensuring effective management capacity into the future. A social enterprise that is looking to the future will engage with its members to ensure that they buy in to the ethos of the business and that they feel sufficiently engaged with the business. This is important, as well trained engaged members will become the next generation of Board members that will lead the strategic direction on the business; it would be great to have a pool of future directors waiting in the wings that could be called upon when a director departs the business. Unfortunately this is rarely the case, it is more usual for the Board to try and head hunt, or convince people to step up to the mark and then spend time training them up appropriately.
A strong engaged Board that is able to provide effective scrutiny and support to operational managers and will allow ‘check and balance’ to take place between the Board (answerable to the members and responsible for setting strategic direction) and the operational manager (often the founder member of the business and responsible for the day to day effective operational management of the business).
A strong Board is important when a founding operational manager decides to leave the business, they then need to represent the culture and values of the business when they recruit a new operational manager who is likely to be new to the business and be less comfortable with its values and vision. A good Board will do a risk assessment on the losing key members of staff on the effect this loss will have on the business. If the highlighted risk is deemed to be ‘high’ they should then come up with actions to mitigate those risks, this could include training or up-skilling other employees, Board members or volunteers.
In an ideal world when a founding manager is going to leave the business this would be a planned process where the Board along with the departing manager have time to develop an effective succession plan and recruitment process.
The Centre has supported a number of social enterprises through facilitated visioning exercises to plan this process effectively. The resulting transition from one operational manager to another is smooth without major organisational disruption.
The Wales Co-operative Centre supports the development and growth of social entrepreneurship, social enterprises and co-operatives in Wales.
For more information, visit www.walescooperative.org call us on 0300 111 5050 and follow us on Twitter @WalesCoopCentre.