Business succession planning may be the single-most neglected aspect of business ownership. Don’t make the same mistake that so many others do. Instead, get started with your plans today.
You can’t run a business, regardless of its size, without talented people ready to move into key positions when the current occupants leave. Even the most successful employers can run off a cliff if they don’t have a solid succession plan in place.
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Successfully passing the baton to the next generation is a goal for many business leaders. It can also be a sound business move if the right steps are taken. By clearly communicating succession intentions, developing strong relational bonds, and proving the fitness of next-generation leaders, family firms can achieve buy-in from their nonfamily employees. Not only will this make for a smooth leadership transition, but it can also increase nonfamily identification with both the family and the firm, creating a more productive and satisfied workforce that propels the firm for years to come.
7 Key Ways To Plan for Business Succession
1. Be Proactive With a Plan
Sometimes, you’ll know well in advance if a hard-to-replace team member is going to leave the company a planned retirement is a good example. But other times, you’ll be caught off-guard by a sudden and potentially disorienting employee departure. That’s why you need a plan now.
First, consider all the key roles on your team and answer these two questions:
- What’s the day-to-day impact of X position on our company or department?
- If the person currently in X position left, how would that affect our operations?
2. Pinpoint Succession Candidates
Once you have a handle on the ripple effect that the departure of certain employees might cause, choose team members who could potentially step into those positions.
Ask yourself:
- If we were to hire for X position internally, which employees would be the strongest candidates for stepping into this role?
- Would those candidates need training? And, if so, what type?
While the obvious successor to a role may be the person who is immediately next in line in the organizational chart, don’t discount other promising employees. Look for people who display the skills necessary to thrive in higher positions, regardless of their current titles.
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But don’t just assume you know how people on your team view their career goals. You may have certain team members in mind for senior management roles, but who’s to say they’ll even be interested in the idea once it’s presented to them? If you haven’t already, talk to these employees about how they view their professional future before making your business succession choices.
3. Let Them Know
In private meetings, explain to each protege that they’re being singled out for positions of increasing importance. Establish an understanding that there are no guarantees and that the situation can change due to circumstances encountered by either the company or the succession candidates themselves.
4. Step Up Professional Development Efforts
Ideally, you have already been investing in the career development of those you select as your succession choices. Now that preparation needs to be ramped up. Job rotation is a good way to help your candidates gain additional knowledge and experience. And connecting them with mentors can boost their abilities in the critical area of soft skills: The best leaders have strong communication skills, as well as polished interpersonal abilities, such as empathy and diplomacy.
5. Do a Trial Run Of Your Business Succession Planning
Don’t wait until there’s a crisis to test whether an employee has the right stuff to assume a more advanced role. Have a potential successor assume some responsibilities of a manager who’s taking a vacation. The employee will gain valuable experience and appreciate the opportunity to shine. And you can assess where that person might need some additional training and development.
6. Integrate Your Business Succession Planning into Your Hiring Strategy
Once you’ve identified employees as successors for critical roles in your organization, take note of any talent gaps they would leave behind if tapped. That can help you identify where to focus your future recruiting efforts.
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7. Think about your own successor
When making a succession plan for your organization, keep in mind that your own role will someday require backfilling. Maybe you’ll decide to take advantage of a new opportunity, or you’ll put in your time and retire from the workforce. So it’s important to ask yourself, which employee could step into your shoes one day? And what can you do, starting now, to help that person prepare for the transition?
Conclusion
The members of your workforce aren’t fixed assets and changes in your team’s lineup are inevitable. You may not always be able to predict a valued employee’s departure from the firm. But through effective succession planning, you can pave the way for the continuity so critical to your business’s future.
