Succession Planning: The do's and don'ts
The do's and don'ts of good succession planning.
Articulate strategic direction
A good succession plan enables a smooth transition with less likelihood of disruption to operations. By planning well in advance a business can maximise the value derived and enable it to meet future needs.
In the case of small businesses, succession plans are often known as continuity plans, since without them the businesses may cease to exist. Succession plans can provide a number of important benefits for companies that develop them.
For example, a succession plan may help a business retain key employees, reduce its tax burden, and maintain the value of its stock and assets during a management or ownership transition.
Succession plans may also prove valuable in allowing a business owner to retire in comfort and continue to provide for family members who may be involved with the company.
The first step is to identify and prioritise the future direction of the business through its strategic plan which should be succinct and clear. Succession planning should be part of the overall strategy and must be agreed and understood by all. Everyone in the firm should know the business's basic goals and how their roles contribute to achievement of those objectives.
Develop a resourcing plan
The next step is to determine the resource criteria needed to accomplish the strategic goals. Planning can greatly assist a firm in highlighting and addressing the major gaps that may occur from key personnel leaving the firm.
Determine current and future needs
Succession planning should in an ideal world aim to make optimum use of all the productive resources within a firm with a view to ensuring the current and future well-being of the firm and its people.
Those responsible for succession planning need to know as much as possible about the future of the business, how it is likely to change, and how such change might affect the numbers involved and the skills they need to possess.
The old succession planning was purely about the business's needs. The modern version takes account of the growing recognition that people increasingly need to make their own career decisions and to balance career and family responsibilities.
The emphasis is about balancing the aspirations of individuals with those of their employing firm, as far as possible customising moves to meet the needs of employees, their families and the changing skill requirements of the organisation.
It is important to recognise that not all staff want to be considered for the career opportunities available. Employees must be given the opportunity to indicate interest in roles and willingness to participate in succession planning activities.
Develop a succession planning strategy
It is only at this point that the business can start to identify gaps, provide development assistance and start to select successors of key positions. The business will understand whether the potential pool of interested parties can sustain the firm's needs or if additional talent will need to be sought outside of the business as well.
Business owners that fail to adhere to the above steps may end up cobbling together succession plans that do not reflect the best interests of the company or of its stakeholders (valued staffers, family members, partners, etc.).