I understand that a successful succession plan is something which all independent companies struggle with. It is not easy to achieve the right solution. Yet succession planning is critical for business success.

Because I bought the company from my mother, who was one of the founders of Cosmo, succession is something that I personally have been challenged by, and have given a lot of thought to. After 30 years of running this firm in the Japanese market, where the brand of a company and the years since the company has been in business are both very important in the market, I’m still working towards an ideal succession plan.

Challenges

Needless to say, it is particularly difficult to find a successor for a service company, let alone, a communications company. Many of our skills and networks, which are critical for the success of our firms, lie within the person, and that is something that could not be replaced or passed on easily.

As Cosmo helps many US clients enter the Japanese market, we search for bilingual and bicultural staff to help our clients navigate Japan. Because the country’s communications industry has not developed as quickly as other countries, the pool of communications specialists is limited, especially bilingual candidates.

The solutions often practiced in the West, whether it is to promote from within or find a possible candidate through a third party or your own network, is something that may not work so easily in Japan and to a large extent, Asia. Oftentimes, the relationships to a client, or a key opinion leader, is something which is cultivated over generations.

At times, something like what your grandfather did for them turns out be the credibility and the glue to the relationship. Our firm has a client that we have been working with for over 50 years. This is something that needs to be managed carefully, because they’re a great asset to the firm.

My challenges were all of these; creating a succession plan and identifying the right candidates, while balancing existing business relationships. Although one solution doesn’t fit all, I’ve been able to explore a couple of avenues.

My solution

There are a few options that I am exploring to find a successor. As I have interviewed over 400 people over the past ten years, I knew that finding the perfect candidate was going to be a challenge. 

Option 1: Since the world of communication in Japan is less mature than in other markets, I looked broadly at related industries, such as consulting, research, marketing etc. Although this gave me access to a wide range of well-qualified people, it was not easy to find ideal candidates.

Option 2: Instead of expanding our view to related industries, I narrowed the focus. What I did was change the focus of the business, so that I could expand the pool of candidates which I could recruit from. This meant that I had to change the focus of our business from being a full-service firm, that could do work in many fields, to become an expert in a particular area. In our case, this was in healthcare.

Although changing one’s business focus is a radical step, it has worked exceptionally well for us in the Japanese market. In Japan, the pool of candidates working in healthcare is much greater than PR, and the candidates have the industry knowledge and credibility that our firm needs. The decision to specialize in healthcare was also well-timed, as the healthcare industry was (and still is) growing. Additionally, because the healthcare industry has such specialized vocabulary, there is a high demand for communications support.

Results

Although this is still an ongoing process, our firm Cosmo has now established a brand in the healthcare market as Cosmo Healthcare. Over 70% of our clients are in the healthcare industry, namely pharmaceutical or medical device businesses. 

A few of our senior managers have backgrounds in healthcare and come from the pharmaceutical or medical device areas. The focus has also enabled me to groom those individuals internally, since I’ve been able to recruit individuals who are truly interested in this area. 

Changing the focus of the firm and building an expertise does not happen overnight. It took nearly seven years to do this at Cosmo. Having said this, it did sharpen our succession plan, and has added to my candidate pool, internally, as well. 

A solution to a challenging task such as a succession plan requires luck, and a willingness to think outside of the box. In my case, it was one of the reasons to change the focus of the firm's expertise. Every firm must consider the market they’re operating in, to best plan for succession.

Having hired many high performing individuals, with specialized knowledge and interest within the industry, I feel confident that I made the right choices. Although this is still a work in progress, it is integral to the continued success of our business.