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E-Folder - Succession Planning - Turning Over The Reins
Businesses of every type and size are faced with a major transition in their management at some time in their history. The ability to make this transition with a minimum of disruption to the organization and loss in continuity of strategy is critical to the future of the company. It does not matter if it is a mom ‘n pop grocery store or a large, multinational corporation. Turning over the reins from the founders and original executives to the next generation, whether to a member of the famil
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
y, long-time employee or someone from outside the current organization, requires forethought, advance planning and gradual transfer of responsibilities to have the best chance of success.
Smaller businesses have less financial and organizational resources available to commit to this planning. In addition, there are usually other interpersonal and relationship issues that cause further complications to an orderly process of management transition. Many times the prime member of the organizatio
Smaller businesses have less financial and organizational resources available to commit to this planning. In addition, there are usually other interpersonal and relationship issues that cause further complications to an orderly process of management transition. Many times the prime member of the organizatio
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
does not want to admit that the time is coming and begin the planning process but, all to often, he allows an unplanned event like poor health or an accident to determine the timing. Then, of course, the organization is in crisis management and options become limited and decisions have to be made without the benefit of careful investigation and consideration.
This is exactly what occurred recently to a family-owned construction company in Northern California. The father, Sam, ran the compa
This is exactly what occurred recently to a family-owned construction company in Northern California. The father, Sam, ran the compa
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ny in the traditional close-to-the-vest fashion. Even his wife who was involved in keeping the books had no clear idea of the real financial health of the company. His son was taught only construction journeyman skills. He served as one of the job foreman along with a key employee who was one of the first people hired when the business was founded twenty years ago.
From all appearances, the business was doing fine. In fact the company had landed the largest contract in its history. Then,
From all appearances, the business was doing fine. In fact the company had landed the largest contract in its history. Then,
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
am had a serious stroke at the age of 55 that left him unable to communicate for six weeks. When he finally emerged from the hospital, he was looking at months of rest and rehabilitation.
Although his son, Jim, was asked to take charge of things, everything practically stopped at the company. No one knew what Sam had negotiated with his golfing buddies over at the county club about the new major contract with the city. There was no pre-planning or project management activities initiated bec
Although his son, Jim, was asked to take charge of things, everything practically stopped at the company. No one knew what Sam had negotiated with his golfing buddies over at the county club about the new major contract with the city. There was no pre-planning or project management activities initiated bec
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
use everyone was too busy on existing projects.
Sam could not keep in touch with the critical information that only he knew was needed to make good decisions about the business. Unfortunately, his health was not improving as fast as he hoped and he could not leave his home. His long time job foreman felt that he was no longer appreciated since he did not have daily contact with Sam anymore. The bank and key customers had no relationship with anyone other than Sam and were getting nervous ab
Sam could not keep in touch with the critical information that only he knew was needed to make good decisions about the business. Unfortunately, his health was not improving as fast as he hoped and he could not leave his home. His long time job foreman felt that he was no longer appreciated since he did not have daily contact with Sam anymore. The bank and key customers had no relationship with anyone other than Sam and were getting nervous ab
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
out the future of the company. The company was in a crisis.
Need for a Plan
For small businesses, ownership is generally closely controlled by those in top management positions. A sole proprietor may wear many hats from President to bookkeeper. As the years passed, family members may have joined the company and now may or may not have piece of the ownership. Many businesses are started with a group of close associates or partners, and they may be relatively close to the same age. They co
Need for a Plan
For small businesses, ownership is generally closely controlled by those in top management positions. A sole proprietor may wear many hats from President to bookkeeper. As the years passed, family members may have joined the company and now may or may not have piece of the ownership. Many businesses are started with a group of close associates or partners, and they may be relatively close to the same age. They co
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ld all be looking at retirement at the same time.
In short, the time to begin to develop a succession plan is when you don’t really need one. To be effective and have the best chance of a smooth transition, it must be well thought out, discussed with affected parties and is best implemented progressively.
The change in leadership and/or ownership of a business is like undergoing a life-threatening medical operation. If it is not properly planned and the participants are not properly trained
In short, the time to begin to develop a succession plan is when you don’t really need one. To be effective and have the best chance of a smooth transition, it must be well thought out, discussed with affected parties and is best implemented progressively.
The change in leadership and/or ownership of a business is like undergoing a life-threatening medical operation. If it is not properly planned and the participants are not properly trained
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
, the patient (i.e. the business) very often will not survive.
How much time should be allowed to effectively make a change? Longer than you would think is the answer! The founder of the company has spent a lifetime getting the knowledge and mastering the skills that he uses every day without realizing it. Clearly, the choice of a successor will have a significant impact on the total time required for the transition. His or her experience, knowledge of the business, and ability to learn wi
How much time should be allowed to effectively make a change? Longer than you would think is the answer! The founder of the company has spent a lifetime getting the knowledge and mastering the skills that he uses every day without realizing it. Clearly, the choice of a successor will have a significant impact on the total time required for the transition. His or her experience, knowledge of the business, and ability to learn wi
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
l be the key determinants of the success and the time required to make the change.
The Succession Planning Process
The succession planning process is a step by step approach.
1. Take a Personal Knowledge Inventory
You have spent years and years amassing an inventory of technical and business knowledge that you use every day. Your successor should have the benefit of that knowledge to be successful. However before you can begin to train and transfer that knowledge, you have to identify wha
The Succession Planning Process
The succession planning process is a step by step approach.
1. Take a Personal Knowledge Inventory
You have spent years and years amassing an inventory of technical and business knowledge that you use every day. Your successor should have the benefit of that knowledge to be successful. However before you can begin to train and transfer that knowledge, you have to identify wha
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
unique attributes and skills you have that you could not expect your chosen successor to have picked up elsewhere.
2. Assess Your Employee Resources
In order to have a firm grip on one of your company’s most valuable assets, you need to assess the performance and capabilities of your employees. Your successor may be among the current group of employees and family members.
•As objectively as possible, take each employee and family member who is associated with the business and judge their p
2. Assess Your Employee Resources
In order to have a firm grip on one of your company’s most valuable assets, you need to assess the performance and capabilities of your employees. Your successor may be among the current group of employees and family members.
•As objectively as possible, take each employee and family member who is associated with the business and judge their p
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
erformance and contributions to the company’s current success.
•Identify those employees who have potential for promotion to higher levels of responsibilities. What additional training and/or experience do they need to be properly prepared? How long before they can be ready for that advancement?
•Which employees are good at their present jobs and you are satisfied with their performance, however they do not now and probably will not be able to handle additional management responsibilities.
•Identify those employees who have potential for promotion to higher levels of responsibilities. What additional training and/or experience do they need to be properly prepared? How long before they can be ready for that advancement?
•Which employees are good at their present jobs and you are satisfied with their performance, however they do not now and probably will not be able to handle additional management responsibilities.
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
•Are there employees who you can not count on in the future? These people are likely to leave for another job, become dissatisfied with the change in leadership, or are not performing satisfactorily and will be probably be dismissed.
3. Define the Dimensions and Critical Requirements for Your Job
Write your own job description. This should be a written clarification and documentation of specific authorities, responsibilities, duties and standards of performance for your position. Remember
3. Define the Dimensions and Critical Requirements for Your Job
Write your own job description. This should be a written clarification and documentation of specific authorities, responsibilities, duties and standards of performance for your position. Remember
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
the job description is written according critical functions of the position and not around your personal characteristics.
4. Develop a Strong Management Team
The transition to a new leadership of the company will be smoother if there is a strong management team in place. Begin to build this foundation by selecting and training strong supervisors to lead each major business functional area: sales/marketing, operations, finance and human resources. Be sure there are job descriptions, written
4. Develop a Strong Management Team
The transition to a new leadership of the company will be smoother if there is a strong management team in place. Begin to build this foundation by selecting and training strong supervisors to lead each major business functional area: sales/marketing, operations, finance and human resources. Be sure there are job descriptions, written
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
o conform to the above procedure, for each of these functions. If there is a weak link in your present organization, identify possible candidates that could eventually be promoted to strengthen that position.
5. Establish a Compensation and Equity Sharing Program
Establish a compensation structure for the new leader that rewards performance achievement and addresses issues of long term security for the new leader.
Consider how you can make the new leader treat your business as his own.
•Ca
5. Establish a Compensation and Equity Sharing Program
Establish a compensation structure for the new leader that rewards performance achievement and addresses issues of long term security for the new leader.
Consider how you can make the new leader treat your business as his own.
•Ca
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
you structure an equity participation plan for him?
•What performance measures can be identified and included in an effective incentive program?
•Are you willing to address the possibility of the new leader eventually putting together a buy-out proposal?
•How do you answer his concerns about his long term career and security with the business?
6. Prepare a Strategic Plan
A business without a plan is like a ship without a rudder. The development of a strategic business plan allows managem
•What performance measures can be identified and included in an effective incentive program?
•Are you willing to address the possibility of the new leader eventually putting together a buy-out proposal?
•How do you answer his concerns about his long term career and security with the business?
6. Prepare a Strategic Plan
A business without a plan is like a ship without a rudder. The development of a strategic business plan allows managem
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ent to weigh its decisions and evaluate them against the decision’s impact on the plan. Not all activities will be foreseen. Management will be required to make unplanned decisions. The strategic business plan guides them in making that decision. It provides the framework for management decision-making.
7. Conduct a Business Valuation
When you decide to transfer control of your business to a new leader, it is wise to have a formal business valuation completed around the transfer date. This e
7. Conduct a Business Valuation
When you decide to transfer control of your business to a new leader, it is wise to have a formal business valuation completed around the transfer date. This e
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
tablishes a baseline which may be of value at a later date should disputes arise about how much the new leader contributed to the future success of the company.
Turning over the Reins
Once the decision on the successor has been made and the above steps to successful succession planning have been taken, then establish an aggressive timetable to delegate responsibilities and authority.
You may find that delegating your authority, your work, and your responsibilities to another person is one of
Turning over the Reins
Once the decision on the successor has been made and the above steps to successful succession planning have been taken, then establish an aggressive timetable to delegate responsibilities and authority.
You may find that delegating your authority, your work, and your responsibilities to another person is one of
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
the hardest jobs you will do. It is often very difficult to let go of control and responsibility when you have exercised them for a long time. However, this is the primary tool you will use to develop your successor as your company’s next man¬ager. You should start delegating immediately, as soon as you have chosen a successor. This will make it much easier for your successor to fill the top job, particularly if it becomes abruptly vacant.
As quickly as practical, you must get out of the way
As quickly as practical, you must get out of the way
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
and let the new leader do his thing! Any “Monday morning quarterbacking” will only harm his abilities to establish control and stature with the employees, suppliers and customers.
Planning for management changes is an important part of a successful future for you, your family, and your business. You will need help so be sure to involve professional legal, tax, estate and business consultants. Then you will be able to concentrate on the growth of your business without worries about the future
Planning for management changes is an important part of a successful future for you, your family, and your business. You will need help so be sure to involve professional legal, tax, estate and business consultants. Then you will be able to concentrate on the growth of your business without worries about the future
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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