Succession Planning for the Future of Your Business
Succession planning, sometimes referred to as succession development, is when a company works to identify and develop new leaders who can replace old leaders as key roles become available. The ultimate goal is to ensure that there is never an important role open for which another employee within the organization is not prepared to assume.
In order to be successful in succession planning, a business must create a detailed plan to keep the team moving forward in any and all circumstances, including the loss of a key employee or the identification of a skillset that the business is lacking.
When starting a new business, it is advantageous to do so with a succession plan in mind. Consider who you’d want to take over when you are ready to retire and how you can involve this person from the beginning.
Succession planning is an important part of talent management.
When a company’s performance depends on its workforce, talent management becomes a top priority. Talent management is a process designed to attract, onboard, develop, motivate, and retain high-performing employees. The goals of employees who are engaged tend to reflect the goals of the business, thereby leading to greater client satisfaction, improved productivity, and increased business performance.
Succession planning’s role in talent management is important for employees because it offers opportunities like learning new skills, advancing their careers, and boosting their earning potential. This leads to employees who feel valued and like essential parts of their team, which is what talent management is all about!
Succession planning is not replacement planning.
Succession planning takes a broad view of the company as a whole whereas replacement planning is part of an organization’s operating strategy. Replacement planning is when a company identifies individuals who are seen as the best options for backups for current employees. Replacement planning is focused on individual positions and succession planning takes a look at the total operation.
Tips for getting started with succession planning.
Succession planning could take the future of your business to the next level. Sometimes the hardest part is just taking the time and initiative to get started. Here are Six Simple Tips to Start Succession Planning:
1. Determine the key roles in the entire organization.
What are the key roles in your company? Are there specific key employees who may not be in key roles but are extremely valued by the organization (someone clients ask for, someone who knows how to fix anything, etc.)? What is the daily impact of this position? If the person in this position left, how would the business be affected? (Remember to consider your own role!)
2. Identify succession candidates.
For each key role, select the strongest internal candidate who could potentially step into the role. During the identification process, try to focus on skill sets rather than current titles. Confirm that the succession candidate you select is someone who would actually move into this role.
3. Meet privately with potential succession candidates.
When you identify a succession candidate, have a discussion with them to see if the role is in line with their professional goals and aspirations. Be clear that there are no guarantees, but also that they are being asked because of their performance, skills, etc.
4. Start professional development.
After your succession candidate is confirmed for a specific role, it’s important to determine the development needed for a smooth transition. Training, job rotation, and mentorships are all helpful for employee development.
5. Try it out.
Allow the succession candidate to try out the role when the individual in the role is on vacation or away from the office. This is often the best way to learn and gain experience, and identify areas where more training may be needed.
6. Stay current.
Companies are constantly changing, so succession planning should be re-evaluated and refreshed on a regular basis. A succession plan only works when successors continue to be reviewed, trained and developed.
As a CPA and Certified QuickBooks ProAdvisor who specializes in working with small businesses and entrepreneurs, I have seen firsthand the benefits of succession planning. Please contact me if you are interested in discussing how succession planning may help you reach your business goals.