Business owners who are beginning the succession planning process usually find the idea of the transition to be daunting and do not have a clear perspective on where to begin. To help kick off the process, outlined below are the basic steps that should be incorporated in most succession plans.
- Identify the company’s core values. Too often, this vital first step is overlooked. Current leadership first needs to specifically identify the core values which have historically made the business successful. Otherwise, it can be difficult to ensure these values reside within those pegged for future leadership. This can lead to strife and conflict within the organization when new leadership takes the helm.
- Evaluate each person’s future potential. Assessing your management team is an integral part of succession planning. You need to know the skill sets, strengths, weaknesses, and values of the individuals already within the organization. From there, you can assess the gaps that exist between the values and skills identified in the first point above.
- Communicate the plan. This critical step is often avoided. Current leadership often fears that those disappointed by the plan will leave, or those identified for future leadership will act entitled. However, without such communication, individuals will be left with uncertainty and prone to speculate. Therefore, you need to have the conversations, no matter how awkward or difficult they may be.
Tackle these tough discussions early on, and make the vision known. Through open and transparent succession discussions, invite employees to talk privately about their preferred future roles within the company. Those who have not been currently identified for future leadership must still be prepared to talk through these difficult decisions.
- Provide training to potential successors. After each succession planning conversation, future leaders should have a list of improvement areas that need be addressed to ensure succession can take place. In addition, each individual should be held accountable for their own performance and their progress against the identified improvement areas.
- Test the future leadership. As simple as it may seem, it is important to provide opportunities for future leaders to test their ability to lead or manage. This can be done in a variety of ways, such as overseeing smaller projects, leading particular initiatives, managing a subset of employees, or running certain management meetings. Doing so will provide current leadership a sightline into what the future may look like.
- Offer incentive or retention plans. Succession planning is useless if your future leaders leave before it is their time. Not only will you be back to the drawing board, but all the time and training put into those individuals will have literally walked out the door.
Retention plans are a great way to retain high performers for the long-run. Plans can be devised based on company performance or individual performance. Implementing such plans formalizes the commitment to the individual, and establishes that their reciprocal commitment will be rewarded in due time.
Succession planning can seem to be an overwhelming process, and it can easily get placed on the back burner. Starting with these simple steps is a great way to get the succession ball rolling. Additional aspects of the process can be filled in gradually to account for the unique characteristics of your company and the individuals you employ.
Brian J. Sharkey is a Director with Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at Email.
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