Succession Planning: How To Pass The Torch In Your Business
There comes a time in business when you need to pass the torch to another person. This may be because of retirement, or just not wanting to shoulder the responsibility any longer. This is where succession planning, also known as replacement planning, comes into play.
Many business leaders assume that when they step down, the business will be able to keep running, and everything will work out naturally. However, this isn’t the case; the company needs to have carefully laid plans in place to ensure the smooth continuance of the company in their absence. The act of having these plans in place is succession planning, which is when the leadership roles are passed to another employee or group of employees.
If your succession plan is well thought out, it can lead to a smooth transition with little or no disruption to the running of the business. You know the right people will be promoted at the right time and into the right roles for the continuing success of the company.
What happens when there’s no succession plan in place?
If a key leader steps out of the company without having a succession plan in place, the business can become unstable because of the disruption. Without a clearly defined leader in place, conflict can occur due to employees vying to fill the gap.
If the company is family-owned and operated, succession planning can be deeply personal and emotional. There is also the possibility of widening the circle of stakeholders to include non-employee family members. If the company is to succeed during the time following the handover, there needs to be a clear focus laid out as part of the succession plans.
Is succession planning a one-time thing?
You might think that succession planning is something that’s done and forgotten about; after all, you have the plan in place and know what’s going to happen. However, this isn’t the case. Succession planning should be an ongoing process that’s looked at and reevaluated year-on-year.
You should consider each leadership team member's skills and identify any replacements from within and outside of the company. It should also be seen as an opportunity to train employees so they’re prepared to take control if needed.
As part of your succession plan, you should consider:
- Recruitment and hiring - you need to choose candidates who are capable of rising through the ranks when the time comes.
- Training - when it comes time for the succession plans to be used, some of your employees will be promoted, meaning they need to know more about the business than their current role. Having additional training and crosstraining in place now can help you avoid these problems in the future.
Remember, succession planning isn’t just focusing on the future. It’s impossible to plan for the future if you don’t have a firm grasp on the present. You need to know the reality of your company, how it operates, where the value is and who the most valuable customers are before you can provide continuity in meaningful ways.
Do I need more than one type of succession plan?
Businesses may need to have more than one type of succession plan in place. There’s the opinion to have an emergency succession plan that comes into place when a key leader has to leave the company unexpectedly. Whereas if the departure is expected, a long-term succession plan can help the company prepare for leadership changes.
Your succession plan can be as simple as naming the single person who will take over once the key leader has left, or it can be as complex as overhauling the entire structure of the company to align it with long-term objectives.
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