Everywhere I go, I hear a common complaint from the manufacturers we serve: “I can’t find the skilled people I need to fill my customer orders!” Without any doubt this is a very serious problem. However, few talk about a related issue which is potentially much more serious: “Where is the next generation of company leadership going to come from?”
The Baby Boom Generation is retiring and as these millions of people step away from the workforce, we will lose essential skills and technical know-how Pennsylvania’s manufacturing firms will be left vulnerable with a void at the top. Consider this:
• 75% of our manufacturing companies are family owned
• 55% of their owners are older than 55
• 40% plan to retire within the next five years
• 57% of firms have no plan for succession.
The absence of succession planning by Pennsylvania manufacturers is a quietly gathering crisis which must be addressed. The great risk is that many firms will fail for want of a succession plan and that the firm, its jobs and its assets will drain from the Pennsylvania economy.
In my manufacturing career, I participated in two separate successions. One was to pass on the company from one generation to the next. The second was the ultimate sale of the business to a competitor hungry for the cutting-edge technology we had developed and patented. Both cases required planning and patience, teamed with expertise in financial, legal, technical and cultural aspects of the transition.
All the necessary planning does not happen overnight. There are many options available for succession and by starting the process early, all options are open. Delaying will take important options off the table.
What is the plan for your business? Who is capable of leading it through the challenges presented in this ever-changing global world in which we operate? The only way to assure that the business lives on is to start the planning process early, utilizing an experienced team of experts well versed in addressing the countless variables you will encounter along the way. For the sake of all those who are stakeholders in your business, don’t wait!