Spotting Fatal Flaws: How to Pick The Right Business Leaders
In an industry as demanding and complex as construction, succession planning often gets pushed aside in favor of immediate project concerns. Yet the future of every business hinges on it. Many owners are within seven to 10 years of transitioning out, but few have a clear plan for how to pass the baton. Why?
For one, the next generation of leaders must be willing to shoulder risk — including putting their personal wealth on the line. Add to that the fact that most construction leaders wear multiple hats, and the idea of training someone else to take over seems overwhelming. It’s not just about skill, but mindset. Leaders must shift from doing the work to building the people who will do the work after them.
Leadership development today is more complicated than ever. The old school “sink or swim” method of throwing people into leadership roles without training or feedback isn’t effective with today’s workforce. The next generation of leaders expects intentional development rather than trial by fire, and they need to understand the full picture, including how the company makes money, where profits go and how ownership works.
The move from single ownership to shared leadership, such as through ESOPs (Employee Stock Ownership Plans), introduces new layers of complexity. Leadership becomes about more than just decision-making, but also collaboration, communication and stakeholder management.
In a time where people prefer texting over talking, critical conversations about leadership, business continuity and ownership mindset are being delayed. These conversations are crucial. Future leaders must be taught, not assumed to understand. Waiting until “later” to explain how things work often turns into never (and by then, it’s too late).
Trust is also essential, but it must be earned and monitored. Future leaders need room to grow, but not so much freedom that their mistakes could sink the company. Give them tools, guidance and just enough rope so that if they fail, they’ll learn.
Leadership is a full-contact sport. It demands communication, emotional intelligence, business savvy and a willingness to keep learning. Many seasoned leaders say, “I wish I’d known this earlier,” so let’s teach the next generation now.
TIPS FOR PLANNING SUCCESS
1) START EARLY
Develop leaders long before you plan to exit.
2) BE INTENTIONAL
Training must be structured, ongoing and strategic.
3) ENCOURAGE AN OWNERSHIP MINDSET
Don’t wait to give equity and expect people to act like owners. Teach them to think like owners first, then offer equity as a reward.
4) BE OPEN AND TRANSPARENT
Teach financial literacy. Explain how profits, taxes and reinvestment work. Show the broader business context, not just project details.
5) SHARE KNOWLEDGE STRATEGICALLY
Share knowledge deliberately and consistently.