What is a succession plan?
A succession plan is a kind of map for the future of your business. But it’s not just about what will eventually happen. There’s more to it than that. It’s about how adaptable your business is to the day-to-day staff changes that can and do happen all the time.
Naturally, it’s important to plan for the retirement of owners and the promotion/resignation of key executives so that the company can continue to run smoothly. But, as an example, what happens if the Controller who’s been with you for over thirty years has an accident and won’t be back for six-to-eight months?
Does anyone know what he or she does on a day-to-day basis? Is there anyone in the company who can shift into this crucial role without missing a beat?
Write it all down
Good succession planning is good business practice. Partly, it means that corporate knowledge is transferred out of people’s heads into documented processes that can be followed by others. (And of course, as an owner, you know that having thoroughly documented processes is critical if you have any plans to sell the company to an outside buyer.)
Another key area for consideration is the age and make-up of your staff. If everyone ‘important’ is more or less at the same age and stage, the company could be headed for a crisis as retirement gets closer.
Be sure you have people of different age groups, with the younger ones rising in their careers so that at least some of them can take over at the appropriate times. You want people who can potentially remain with the company and build their future there.
Everything changes all the time
Succession planning should be part of a regular internal review. This is because so few businesses look exactly the same from one year to the next. People get promoted, they get hired, they move on. The market changes and the company has to resize accordingly. It’s part of the cycle.
Once a year you should think about looking at what everyone does from day-to-day. It will give you a good general overview of how the company works, while at the same time providing a comprehensive guide to various roles within your organization.
The key areas to address in your review include:
- Assess your current processes and programs, your goals and objectives
- Match these to the capabilities of your staff
- Plan to manage any gaps that might arise as key staff are promoted or leave
Do you need help with succession planning?
Joanne Elek, Vice President, Executive Search at Richter is pleased to assist you.