Succession Planning: Hunsaker's Five Steps

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D. Scot Hunsaker, Ardent GroupD. Scot Hunsaker, Ardent Group

On Monday, December 11, 2023, D. Scot Hunsaker kicked off the AQUA Live Leadership Retreat with a workshop on succession planning. Hunsaker is the former CEO of aquatic design firm Counsilman-Hunsaker, where he grew the company's revenue by a factor of 10, quadrupled the employees, and opened four new offices in North America. In 2012, he sold the firm to his employees for cash.

Hunsaker now runs the Ardent Group, whose mission is to help business owners prepare for a healthy succession, teaching their employees how to think like owners. He has also served on the board of directors, including the National Swimming Pool Foundation (NSPF) and The Council for the Model Aquatic Health Code (CMAHC).

In case you missed his invaluable workshop, the following includes Hunsaker's five steps to transfer institutional knowledge and business savvy to the next generation of leadership.


Apart from directly asking your employees and customers about your business and leadership style, through tools like surveys or just face-to-face, your company can also use data to drive these authentic conversations.

"Think of your company as a beach ball," says Hunsaker. "Each of your employees might think the color of that beach ball is different. One sees yellow, one sees blue, and so on and so forth. However, it's not important that your company agrees on what color the beach ball is; it's important that everyone within the company explains why they see a certain color. Meaning, you need to have authentic conversations with your employees about your business to plan for the future."

Sharing how the business is doing β€” in the past, present and future, using data on customers and financial performance β€” is the impartial, objective key to these conversations. Regardless of what data is used and shared, transparency is what drives your legacy.

"Creating transparency through conversation, new dynamics and sharing information is the touchstone that helped me create a company culture that is still a source of pride for me," says Hunsaker. "If you hope to leave a legacy, you must shift from being the kind of owner who talks about authenticity to one who has authenticity. You must get real. You do this by creating the systems that allow people to look forward together. Those systems need to be based on the real issues and data that affect the customers and the team."


Picking the next leader, or the next members to make up the leadership team, can be very stressful in the succession planning process. Choosing the wrong person or people to take over your business can be detrimental, if not fatal, to your company. Luckily, Hunsaker has some advice to help you choose the right person or people to lead your business to even more success even after you're gone.

"How do we identify those that have the will and ability to lead?" asks Hunsaker. "The tool I found to be very effective was strategic planning. Typically, you take all the information you got from having your authentic conversations, then throw them up on a board and identify the opportunities for improvement. From there, you come up with a tactical plan in order to do it. The key to strategic planning is accountability.

"The strategic planning team should not be more than 10 people; anything over 10 people is public speaking. The team has to act as the referee, you as the current business owner can not be the one calling the shots."

Hunsaker went on to explain three different scenarios he experienced with his leadership team where an employee didn't end up working out as a leader. The first being someone who thought they wanted to be a leader, but after trying it, decided they liked their previous role within the company better; the second being someone who had paralysis through analysis, or in other words, could never make a decision; the third person being someone who liked telling everyone else what to do, but never seemed to do anything themselves.

"Sometimes, you have two employees up against each other for a promotion to leadership," says Hunsaker. "On paper, one seems to stand out as the obvious pick; however, in person, the other employee continuously demonstrates their will and ability to lead. When it comes time to select that new president, and you pick the natural leader over the one who has more credentials, everyone will understand, and no one will get upset because they would have experienced that natural leadership themselves."


Hunsaker asked the group of attendees where they store most of their business information, and unsurprisingly, a majority of them responded with, "in their heads." He went on to ask a follow-up question on where the worst place is to store business information, and again, they responded with, "in their heads." So why then do owners not transfer their business information out of their heads?

"My father used to caution me about writing anything down," says Hunsaker. "He would state that if our business information was written down, then somebody might end up stealing it. Some business owners worry about that, but it's my belief that the information itself doesn't have that much value. It's how you use that information and apply it to your business that's valuable."

In order to transfer his business knowledge from his head and into his business, Hunsaker took almost two years creating a master toolbox with over 3,000 details.

"I suspect many of you suffer from what I suffered from as a business owner... insomnia," says Hunskaer. "I encourage you to write down the things that are keeping you up at night because that's a pretty good indicator of a lesson learned. You have to share the lessons you've learned, like accidentally floating a pool for instance, with your leadership team so that they don't have to learn it on their own.

"A lunch-and-learn used to cost me around $5,000. In order to capitalize on this cost, we would put the speaking summary, notes, PowerPoint, audio file and even the video file into our master toolbox knowledge base. Now, when a brand-new employee needed to learn about a topic past employees had already learned about, they could just go look in our company's toolbox. Do you think that would make your company worth more to a third party? Do you think that would give your leadership team the information necessary to make knowledgeable decisions? Absolutely." 


As owners, time can get away from you. There are probably so many projects either in the works, or in the back of your mind, that you want and need to get done; however, you just don't have the time to execute them all. Well, Hunsaker felt this pain, too, so he created a process known as a situation report.

"If one of your team members brings you a great idea, and you say it's a great idea and that your company needs to do it, but then three months later, nothing happens, how do you think they'll feel?" asks Hunsaker. "If the same exact thing happens a second time, what's the likelihood they'll bring you a third great idea? In order to let my employees continue to have and execute their great ideas, even when I was too busy to do so, we created a situation report.

"During our bi-monthly meetings, we would write out situation reports, which included a topic, the issue, observations, opportunities for improvement, recommendations going forward, etc. Then, when everything was written out, we'd discuss if we had enough information to make a knowledgeable decision. Most of the time, we didn't have enough information, so we'd have to go out and gather the remaining information that was needed. Once we had enough information, we'd affect the change. The key takeaway being you can't have a system improvement process if you don't have a toolbox. You need to be able to sharpen your tools."

Another way for Hunsaker's company to sharpen the tools in their toolbox was a process called the jar system, which was created and implemented by someone other than Hunsaker. "I had a change agent who was phenomenal at their job. However, one of my challenges as a leader was celebrating my employees' successes because I was so focused on the future, not the present. This employee came up with a jar system. Within the jars, there were red, white and green beads. Red beads represented problems in the field, white beads represented problems in the office, and green beads represented money. Each situation report coincided with a specific bead, so instead of focusing so much on the future, my entire company was now focused on the present challenges and successes of our business. And the jar system wasn't my idea, it was the innovative idea of one of my employees." 


Once the prior four steps are completed, the leadership team should have the confidence and ability to successfully lead the company, and so now, a conversation about ownership should follow.

"If you try to complete these steps in your last 45 days of leading your organization, it's very likely you're going to push your leadership team out of their comfort zones," says Hunsaker. "You're going to put them into a sheer terror zone, and then it's just fight or flight at that point. Here are two examples of what I'm talking about.

"You go to an employee who's been standing out to invite them to become an owner of the company without preparing them. First scenario, they could express their intentions of wanting to retire a few years after you, which means you don't have a succession plan at all, you just had a great idea that you can't execute. Second scenario, you could present them with a packet of information from your attorney that makes no sense and is completely overwhelming, which could scare them away from wanting to be an owner, or even worse, scare them away from the company entirely. Before you go to your lawyer, your company needs to come up with an expectation of what it means to be an owner and how owners should be treated."

Hunsaker revealed that prior to retiring, he had a conversation with 17 of his employees to become owners of his company. He ended up selling his company to them for cash within 45 days, which is unheard of. Regardless of how you plan to turn your company over so you can retire, the moral of Hunsaker's succession workshop was to start early, and follow the previous steps so that your succession process goes smoothly. 


To conclude his workshop, Hunsaker clarified one last message. "Turning your employees into owners will give you options for the future. But, I've been misleading you a little bit. You can't turn your employees into owners, they have to turn themselves into owners. We can help them, and we can guide them, but it's up to them to actually become leaders and the future of our companies.

"We start this process by having authentic conversations; identifying those that have the will and ability to lead; getting all our institutional knowledge out of our heads and into our organizations; teaching our employees how to manage change; and lastly, trusting whoever you choose to take on your legacy. The decisions you make when going through all five of these steps will impact you, your employees, your customers and your family. There are so many lives that your succession plan decision will impact. It's a tremendous privilege, as well as a tremendous responsibility. Your legacy starts today. What are you going to do about it?" 

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