The best way to prepare for business succession is to imagine both the best and worst that could happen to your company after you’re no longer at the helm. Instead of waiting for the “right” moment to develop your succession plan, take a proactive approach and begin planning now so that the investment you’ve made in your business continues to strengthen and grow.
Here are several tips for successful succession planning:
- Search out your stars. A company’s future depends on its strong leadership. You’ll need to determine, for example, if the next leader will be someone in the family or an individual brought in from outside the company. Look for employees who have strong talents, skills that will help the business grow, and a creative and enthusiastic stance toward their work.
- Align your succession plan with the company’s core values. Even though your succession plan is a separate entity from your company’s overall strategic plan, it must incorporate the core values of your business. That should include key competencies and positions, required skills, and a careful examination of future goals.
- Let your succession plan help fill the gaps. Different people bring different skills and talents to leadership. Expecting one person to be strong in all areas in not only unrealistic but potentially damaging to the company’s future. While a succession plan is primarily a tool for the future, it also can help you fill current gaps. Creating a succession plan requires a close and careful examination of how the business is being run. If you detect gaps — such as a lack of strong financial skills in a key department — now is the time to take care of those holes. A succession plan will force you to do what’s necessary before the plan is actually put into action.
- Involve as many people as you can. That old saying about having too many cooks in the kitchen is appropriate for small businesses, particularly those that are family run. Still, if you can create a sense of responsibility throughout the organization, you are more likely to get the support you’ll need to create a solid and dependable succession plan. Certainly, your key players will have more influence than lower-rung employees, yet everyone’s contributions will be necessary when it comes time to put that succession plan into place.
- Determine your role. How involved do you want to be during the transition phase when your role will be assumed by the new leadership? How do you want to be compensated? What about after the transition has been completed? Don’t wait for these milestones to occur without some knowledge of your level of involvement. Compensation issues, for instance, are directly linked to the company’s ability to survive financially. If you are to be paid a salary, how will that impact other employees’ compensation?
- Look at the age of your workers. If you have an aging workforce with employees approaching retirement, it’s important to focus on developing talent over the long term. Knowing the skills and talents of your people is key to developing a plan that accommodates for any loss of personnel who bring certain proficiencies to their jobs. A succession plan may include a skills-and-performance database that contains all the information you and others will need to identify job functions, criteria, and experience.
- Review, review, review. It would be great if a template were available for succession planning, but the best plans are really the ones that are custom designed. Your company is like no other and therefore your succession plan should not look like another plan. Consider your succession plan as a process that must be carefully and regularly reviewed.