There has been a lot written about succession planning, and we are aware that succession planning is more than mitigating the risk of someone “getting hit by a bus.” Rather, an ideal succession plan enables a smooth transition, minimizes disruptions to the business, and incorporates the following do’s and don’ts to achieve an effective plan.
- Recognize that succession planning is your responsibility. Take ownership of the process and commit the necessary time and resources to ensure that you have a thoughtful plan.
- Align succession planning with the overall business strategy by incorporating it into your internal company processes.
- Identify your company’s critical positions and its high potential candidates. Prepare a gap analysis of the skills possessed by those individuals compared to the skills considered necessary.
- Create a development plan for high potential individuals. Developing leaders within your organization not only makes it stronger, but provides growth opportunities as well.
- Engage others in the process. Recognize that succession planning creates an opportunity for those to come.
- Develop a list of major stakeholders who may be impacted by the transition and decide how and when they will be notified. Communicate your plan to key management and successors when the plan is complete so they have a clear understanding of the future path and their roles.
- Wait until you are looking to exit. Start planning now, but keep it simple. The earlier you start the process, the more likely you will be prepared when an unplanned event occurs.
- Complicate the process. Identify a simple set of criteria for what it takes to be successful that everyone understands and can refer to.
- Make unilateral decisions about potential candidates. Doing so may risk losing high performing individuals.
- Rely on personality evaluations. There is no magical tool or assessment that will determine an individual’s aptitude for leadership success. Avoid the tendency to select a successor who has a similar personality or behavioral attributes as the predecessor.
- Hesitate to utilize quality advisors, such as an attorney, accountant, insurance agent, and wealth advisor, to help ensure you properly plan for your needs and objectives.
The fundamental elements of succession planning include making the development of future leaders a priority, identifying high potential candidates, assessing your current situation, and mentoring your team to create an environment in which everyone can thrive. Failure to adequately plan for an orderly business succession can severely disrupt business operations, resulting in monetary losses and potentially diminishing the value created within the business. If you haven’t committed the time and energy to succession planning, let’s start today.
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