Queen Replacement - The Bees Guide to Succession Planning

As discussed in my first article, a beehive is a pretty fascinating place to learn organizational change management principles.? The most significant change an organization will undergo is the loss of a key leader, whether due to retirement or other unforeseen circumstances.? I had the unfortunate opportunity to experience an unforeseen loss of a company founder in 2019.? Our founder was an amazing man and mentor to me for the first 12-years of my career.? During that time, we formed a small consulting group as part of a regional public accounting firm.? We were small but mighty, and in 2012 we spun out to create a new firm focused exclusively on supporting the GovCon industry.? Over the next 6-years, I became an owner and we grew the practice to just shy of 20, and then the unthinkable happened.? Cancer.?

The bees, specifically the workers, always have a backup plan.? They also have a backup to the backup to the backup plan.? The untimely loss of a queen can be catastrophic and lead to a full collapse of the hive unless the workers are prepared.? The workers continually evaluate the productiveness of their queen and always have brood ready to be fed royal jelly to produce the next queen if needed. A typical hive can rear a new queen in a matter of days and be at the point of replacement in a few short weeks. Time is of the essence for the bees, as the worker's life span is only 30-60 days and a long hard winter always looms on the horizon.

Sometimes, it's not the loss of a good queen, but the hive's realization that their queen is unable to keep up with brood production due to age, hive space constraints or simply genetics. In that case, a leadership transition is a must, so the workers will rear a new queen and the hive will be fully operational again in a matter of weeks. If only it were that simple in business.?

A typical commercial hive includes the foundation (big box on the bottom), deeps (larger boxes on top of the foundation) and supers (shallow boxes at the top of the stack). Within the foundation, and the deeps stacked on top of it, the hive uses the space for the rearing of the next crop of new bees. With a productive hive sitting around 80K bees at its peak in the warm months, maintaining headcount requires lots of space.? The supers, stacked on top of the deeps are used for honey storage.? This organizational structure is much the same as what you will see in a wild hive in a hollow tree (or sometimes the side of your house).

As discussed in the first article, the queen lays the egg, but the worker bees determine the type of bee produced based on the needs of the hive, with the vast majority of bees being workers.? This delegation of hive management has served the bees effectively for millennia. If a hive fills up all of the foundation and deeps with brood, then there’s a space constraint, and the workers will create a new queen to alleviate the population stress.? Brood production is one of several reasons why bees may decide their current queen just is not going to get them through the winter.

As a beekeeper, we can also add a new layer of management (additional deep) to a productive hive to delay the swarming event. If not, a new queen will be reared by the workers. After a mating flight the new queen will leave with a significant portion of the worker bees to form a new hive. ?The old queen and what’s left of the workers will be left behind and weakened. For a beekeeper, the first time this happens can be concerning.? Your bustling hive will go from “wide open” to “on the fence” literally in the span of a few days.? If you are lucky enough to catch the swarm (and have the equipment ready to give them a new home) you may be rewarded with a new hive.? The old hive, however, is on the ropes and has a big target on it.? Other healthy hives nearby soon recognize that it’s a lot easier to poach honey from a weak hive, than it is to collect pollen and nectar.?

Far too often, the loss of a founder or exit of a key member of the ownership group will result in a weakening (and even collapse or sale) of the business due to a lack of planning and appropriate management through the process. In this way, leadership transition in business is much the same as a leadership transition in a bee hive. ? I've seen this first hand through multiple business transitions both with clients and my own personal experiences.

A few things to be thinking about both now before an unfortunate event of a leadership transition are as follows:

1)????? Succession Planning - Just as worker bees anticipate the need for a new queen and prepare for her arrival, organizations should ALWAYS have a succession plan.? Revisit the plan annually and be sure to update for changing business circumstances.? A well-prepared transition plan ensures continuity, even during unexpected events. More importantly communicate this plan to your hive, so they know you are planning for their future. Informed employees feel safe and are more loyal to the team they love.

2)????? Timely Preparation - The time to figure out your plan is not when something happens.?Playing these events out in real time is rarely successful. When we lost our founder we had about 18-months to figure out what needed to happen and it ultimately lead to me putting my entire financial existence on the line, with little other than blind faith in our team to persevere.? For our employees, it was equally traumatic. ?They knew the risk and felt them all the same as they thought about their own families and livelihoods dependent on the business’ success.?Despite this, within first two years we almost doubled the size of our little hive and survived the Covid-19 pandemic. Timing in business is never kind.

3)????? Personal & Financial Considerations - It’s hard enough losing a business partner.? If you truly care about your business partners and your employees, you will have those hard conversations and do everything you can to protect your family AND your work family.? As a business owner, your personal life and your business are inextricably linked to one another. It's critical to have both houses in order with your own estate and financial planning and communicate those plans to your senior leadership team to ensure their buy-in. You cannot assume your senior leadership team will be just as happy working for your family/heirs as they have been working for you. This is even more true if you've never articulated that desire to your leadership team.

4)????? Key Person Insurance - Life is short and unfortunately for many, it’s cut short due to unforeseen circumstances.? Insuring (key person insurance) against the worst in a business reliant on you and your partners doesn’t just make good financial sense, I believe it’s also a social obligation to your employees and business partners.? This was a lesson I learned the hard way with our founder’s passing and one I hoped to never repeat. Having key person insurance is a great way to say to your employees, I recognize no one's time here is certain and I want to make sure when I go, I leave the company with enough to carry it through the difficult transition and guarantee the livelihood you and your family depend on. Bonus points for putting that in writing and specifying how the life insurance proceeds should be used, so the leadership team has guidelines and your employees have the added security of knowing "it's in writing."

5)????? Succession Planning & Shareholder Agreements - The time to think about succession is not a year after you’ve joined a business.? If you are considering ownership in a business that does not have succession, retirement and exit outlined in the shareholder agreement, then buyer beware.? The absence of these types of things are non-starters with me and will serve as handcuffs if they are not resolved at the outset.? A lack of clear guidelines for these events is susceptible to abuse by majority partners if you are a minority shareholder, so your only chance to negotiate is before you join.? I’ve seen so many instances in business where “friends” become enemies, simply because of an unwillingness to compromise on issues. Money has a way of changing people and making them complacent. Making decisions beneficial to the long-term health of the business and employees is often at odds to the financial interests of the majority owner. The party in control does not have to agree to anything once they have control.

6)????? Identifying and Nurturing New Leaders - Just as bees rear new queens when needed, organizations must continually identify and nurture emerging leaders to ensure continuity and the success of the company beyond your time. As a leader, there is no greater contribution you can make to an organization than developing the next generation of leaders. As a small business owner, the attracting, developing and retaining the next generation of leaders is huge component of your retirement plan too.

7)????? Bonus thoughts on Hive Structure and Organizational Layers - The hive’s structure—foundations, deeps, and supers—resembles the layers of an organization. The foundation (the company leadership) supports growth, the deeps foster new employee development all too critical with your choices for the second layer of management, and the supers represent the sweet rewards (like honey) achieved through the collective effort of your hive.

This article is the second in a series illustrating my thoughts on business and organizational management from a beekeeper’s perspective.? ??If you enjoy this article, I would welcome a follow or connection request.? If you are a beekeeper and businessperson, I would welcome a comment on your thoughts too!? If this article piqued your interest in the honeybee, please visit https://www.savethebees.com/ to learn more about the plight of the honeybee.? Without the bees, we don’t eat.