Why the Building Materials Industry Must Prioritize Succession Planning: Part 2

Posted on December 18, 2024

Introduction

I was on the phone with a long-time friend and colleague headed to the NRLA Show this week. He said, “This is my 20th trip to that show, and man, the number of old guys, like us, keeps growing every year.” As an official “Old Guy” in the industry, I have become more and more aware of our industry’s need to create succession plans. 2024 has proven to be the year where I have seen more retirements than ever before. At first, I thought I was noticing this because I am in the beginning stages of succession and retirement planning for myself. But over the last 11 months, I can definitively say that retirements have grown this year more than in any of my last 20 years as a recruiter in the building materials industry. This is part 2 of a three-part blog series.

Why Succession Planning Pays Off

The building materials industry faces a unique set of challenges. With shifting market demands, evolving technologies, and a progressively aging workforce, it’s critical for companies to plan for the future. While finding the time and resources to build a strong succession plan may seem daunting, the rewards far outweigh the effort. When executed well, succession planning ensures that organizations survive leadership transitions and thrive in the midst of them. Here’s an expanded look at how this approach delivers long-term value:

1. Ensures Knowledge Transfer

One of the biggest risks in the building materials industry is losing critical expertise when senior employees exit the workforce. Many seasoned professionals carry decades of experience in sourcing, production, distribution, and product development—all of which are essential for success. Without a plan in place, this institutional knowledge can leave with them, creating costly gaps. Succession planning solves this issue by creating systems where knowledge is passed down proactively.

For example, a veteran plant manager retiring after 30 years could gradually mentor an emerging leader, sharing insights about managing workflows, troubleshooting machinery issues, and balancing production costs. This kind of organic knowledge transfer ensures that the company maintains its edge while empowering the next generation to build upon proven methods.

2. Strengthens Leadership

The building materials industry is fast-paced and competitive, requiring leaders to make decisions quickly and adapt to new technologies or market dynamics. Training future leaders as part of a succession plan means companies invest in individuals who understand the nuances of the business and its specific challenges.

Imagine a regional sales manager being groomed to oversee the entire sales department within a growing enterprise. The training process could include hands-on sales strategy coaching and exposure to broader operations, customer relationships, and crisis management. When the leadership change eventually occurs, the transition is seamless, and the incoming leader is immediately effective. Through forecasting and training, companies create a bench of leaders ready to take the reins whenever necessary. This stability protects the business from disruption, even during unexpected departures or market turbulence.

3. Boosts Workforce Engagement

Employees at all levels want to feel their hard work has a purpose and that there’s a path forward for their careers. A thoughtful succession planning strategy demonstrates a company’s commitment to developing internal talent, which inspires loyalty and fosters engagement.

For example, consider a small building materials distributor that identifies promising forklift operators or warehouse employees and provides them with opportunities to grow into supervisory roles. By investing in training programs and leadership pathways, the company sends a clear message to its workforce that advancement is within reach. This type of culture reduces turnover, attracts top talent, and positions the business as an employer of choice.

Building Resilience and Adaptability

Knowledge transfer, strengthened leadership, and workforce engagement create a foundation for resilience in the building materials industry. With these elements in place, businesses can adapt more easily to market shifts. Whether it’s responding to increased demand for sustainable construction materials, navigating supply chain disruptions, or integrating new technologies like automation, a company with a strong internal pipeline can make those pivots efficiently.

For example, regulatory changes suddenly require all suppliers to increase transparency around environmental impacts. A business that has well-trained leaders and skillful staff across departments will have the agility to meet new requirements while maintaining operational efficiency. This level of adaptability turns challenges into opportunities and maintains the company’s competitive edge.

Long-Term Competitive Advantages

Effective succession planning doesn’t just ensure smooth leadership transitions; it drives long-term success in the industry. Companies that take the time to develop people from within avoid the costs and delays of hiring from outside while building deep industry expertise and institutional loyalty. Additionally, internal leaders are often better innovators, as they are familiar with day-to-day operations and well-positioned to identify inefficiencies or new growth areas.

For instance, a senior leader raised within a firm may recognize untapped opportunities for lightweight, durable concrete products that align with growing demand in residential construction. Their knowledge of production processes and market conditions can lead to innovation that generates competitive advantages.

Furthermore, well-crafted succession plans protect against instability during potentially turbulent transitions. Whether succession comes unexpectedly or after a planned retirement, the business stays steady, and customer relationships remain intact—vital traits in industries where reliability and trust are everything.

The Bottom Line

Succession planning is not just a “nice to have” in the building materials industry; it is a critical strategy for growth, efficiency, and resilience. Knowledge transfer preserves years of expertise, leadership development prepares companies to face uncertainties, and engaged employees drive loyalty and innovation. Collectively, these benefits ensure businesses are equipped to thrive during times of transition—or transformation. By prioritizing succession planning today, companies can build a workforce and leadership structure that embodies adaptability, secures business continuity, and lays a foundation for an enduring competitive edge in the future. The question isn’t if you should focus on succession planning—it’s how soon can you start?