Personnel e.bulletin – October 2016

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Growing the Next Generation of Company Leaders

Prepared for the PHCC Educational Foundation by TPO, Inc.

When you are ready to hand over ownership of your company to a successor, you want to ensure that person is ready to take on your leadership role. You can’t be passive about leadership, sitting back and waiting for the best candidates to self-identify and develop through observation. It’s necessary to identify the potential leaders, create a plan for their development, and shepherd that development over enough time so that you can pass on your role and depart as seamlessly as possible.

Identifying Potential Leaders

Before you can start teaching promising employees about leadership in your company, you must identify the best candidates. To do that, first reflect on what makes a good leader.  One useful framework is the concept of “Servant Leadership.”  See the May 2015 Personnel e.bulletin article for more information on Servant Leadership. A servant leader:

  • Focuses on employees’ needs to build a strong organization.
  • Seeks to serve both employees and customers.
  • Builds and develops effective teams that will serve the company in the long term.
  • Focuses on what’s best for employees, stockholders, and customers before monetary concerns to increase long-term success.

To do that, servant leaders display the following qualities:

  • Active listening
  • Empathy
  • Helping employees learn from mistakes
  • Awareness of all employees so that they can provide feedback
  • Persuasiveness – an ability to influence and encourage employees
  • An ability to dream big and take calculated risks
  • Foresight from prior experience
  • Stewardship – an ability to appreciate their employees’ integrity
  • Commitment to and trust in employees’ development
  • An ability to build community
  • Patience and a long-term view of employees’ development

Leadership is challenging. To identify potential leaders who can fit into that mold, look for the following behaviors and skills:

  • Active listening – Potential leaders listen to what others have to say and consider it, and encourage the sharing of ideas.
  • Self-assessment – Potential leaders explore their beliefs and values and those that shape the company. They constantly reassess themselves to discover how those might have changed. They reflect, learn, and change behaviors in ways that will help the company better serve customers.
  • Developing trust – Potential leaders are open and transparent in communication. They ask for help and acknowledge mistakes. They don’t talk about others behind their backs. They are open to changes and are creative. They are willing to do what’s best for other employees and the company rather than focusing on only their own needs.
  • Positivity – Potential leaders are generally positive because effective leaders are more coaches than critics.
  • Clear communication – Potential leaders should be good communicators because leaders have to communicate constantly with their employees to clarify expectations, give feedback, conduct performance management, and work with employees to solve problems.

Developing New Leaders
Plan Your Leadership Development

To best ensure that your company will be in good hands when you leave, take time to plan leadership development. Keep in mind the leadership qualities discussed above that you want to identify and foster in new leaders, and consider the skills and knowledge that will need to be replaced.

Think about when you want to leave, and work backward. Plan the stages of development for potential leaders to fit your time frame. Make sure that you are allowing enough time – leadership skills need to be developed over years, not months.

Once you have a plan, clearly communicate to potential leaders what new roles they’ll be taking on and what skills they’ll be learning so that they know what’s expected and have a clear path forward. Your plan should involve delegating responsibilities to potential leaders.

Delegate and Challenge Potential Leaders

You want to constantly challenge potential leaders for a couple of reasons.  First, you’re more likely to retain star employees if they find challenges and learning opportunities in their work. You want to avoid losing your potential leaders if you can because otherwise your time frame for departure will be pushed back and losing key employees can hurt the company. Second, challenging employees will better prepare them for future leadership.

In delegating responsibilities, make sure to plan what tasks you would like to delegate; identify the employees with the appropriate areas of strength and potential growth; clarify your expectations and the lessons that should be learned; check in regularly and frequently with the employees’ progress; and offer feedback at those checkpoints.

Presumably, these responsibilities will be new for the employees, so you’re facilitating learning on the job reinforced by feedback.  You’re pushing employees out of their comfort zones, and there are risks involved. But even if the potential leaders’ first experience isn’t smooth, with the necessary leadership temperament, they can end up with new skills, improved confidence, valuable lessons, and even more commitment to the company.

Provide Frequent Feedback and Coach Potential Leaders

Before you even set employees on the path to leadership, have development conversations with them. Listen to employees’ goals and what they see as their career trajectory, and give an honest assessment of their strengths as well as the skills they need to develop. 

As mentioned above, check in frequently with potential leaders taking on new responsibilities. You want to challenge these employees, but you don’t want to break them down, either. If you check in frequently, you can catch and address any problems early and have a productive conversation about how to solve them. Don’t criticize potential leaders and dictate how to fix the problem. Ask them questions and listen to them to help them come to a resolution.

Frequent feedback will increase the potential leaders’ trust in you and commitment to the company and will give them more learning opportunities to help their development.

Further Tips

Here are a few other things to keep in mind when developing future leaders:

  • Expand training – As emphasized above, challenge potential leaders. Think hard about all aspects of your job that a new leader would need to tackle. By leading groups of employees on jobs, they can improve at team building and tackle the administrative tasks involved. What other things will they need to learn? Have they worked with managing a budget, timekeeping, or resource control? Who takes care of human-resources-related matters at your company, and will that be part of their new job? This should all be part of planning leadership development.
  • Don’t Rotate Too Quickly – Potential leaders will need to learn a lot of different skills and therefore rotate through a number of different responsibilities throughout their development. But it’s important not to rotate them too quickly. If employees aren’t given enough time to learn and improve in a leadership area, they won’t be ready to lead. That’s why you also need to plan leadership development well in advance.
  • Shadowing – Allow potential leaders to shadow you in particularly difficult tasks before they try them.
  • Solicit the help of older workers – You don’t want older workers’ institutional knowledge and skills to be lost when they leave the company. If possible, set up formal or informal mentoring between potential leaders and older workers. Also, try to keep key older workers around through contracting or part-time assignments to retain their contribution to the company as long as possible.
  • Develop Multiple Leaders – You’ll notice that this article often talks about potential leaders in the plural. That’s because if you want to retire or leave your business for good, you’ll give yourself a better chance with multiple candidates to take the helm. If you train only one person, that person could choose to leave before entering leadership. Also, if someone doesn’t work out after leadership training or decides he or she doesn’t want to be a leader, you might have to come back until a suitable replacement can be found and developed. It’s therefore safer to challenge and coach multiple employees.

Throughout all this, remember to practice what you preach. If you want to develop effective leaders who will find success for your company, be the best leader you can be. No one is perfect, but if you are transparent about any mistakes and show that you’ve learned from them, potential leaders will more likely model that behavior. By constantly learning yourself and fostering a team environment, you’ll best retain key employees and develop future leaders.


This content was developed for the PHCC Educational Foundation by TPO, Inc. ( Please consult your HR professional or attorney for further advice, as laws may differ in each state. Laws continue to evolve; the information presented is as of September 2016 Any omission or inclusion of incorrect data is unintentional. Please note this article is not intended to provide legal advice or to substitute for supervisor employment law training.

The PHCC Educational Foundation, a partnership of contractors, manufacturers and wholesalers was founded in 1987 to serve the plumbing-heating-cooling industry by preparing contractors and their employees to meet the challenges of a constantly changing marketplace. If you found this article helpful, please consider supporting the Foundation by making a contribution at

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