Succession planning is an essential part of doing business, no matter how certain your future appears. It’s easy to put off planning when everything seems to be going so well, right? Wrong. Now is the time to begin succession planning.
What is Succession Planning?
Success planning is a process undertaken by a business owner that ensures their business is left in good hands after their exit. This means the business will be ready deal with unexpected circumstances, is likely to have stronger leadership and will encourage regular reviews of their goals and objectives. Succession planning is often seen as an important part of an exit strategy.
Why is Succession Planning in Business important?
There are many reasons why Succession Planning should not wait.
Dealing with unexpected circumstances in business
No matter how good you and your staff are at revenue projections or economic predictions, no one can truly plan for disaster. It might be an unforeseen illness, a natural disaster, or a CEO’s decision to suddenly retire. So while you can’t plan for disaster, succession planning can put in a series of contingencies that will help your company stay afloat if unforeseen events occur.
Succession planning benefits the business now.
Just as business practices have evolved over the years, succession planning has also grown and changed. It’s no longer a plan that can only be accessed when leadership is going to change; a succession plan can be used before its “real” intent is necessary. It can be used to build strong leadership, help a business survive the daily changes in the marketplace, and force executives to review and examine the company’s current goals.
Gives your colleagues a voice.
If you’re running a family owned or small business, the process of succession planning will give the major participants an opportunity to express their needs and concerns. Giving them that voice will also help create a sense of responsibility throughout the organisation. Resist the temptation to solely carry the entire weight of creating and then sustaining a plan.
Helps to sustain income and support expenses.
Talking about money should be a priority. People generally don’t want to work for free and things don’t pay for themselves. Succession planning can provide answers as to what you—and your staff—will need for future income. Plus, it will reveal what kinds of expenses you may incur once you step out of the main leadership role. Ask yourself questions about: your annual income, other benefits for you and your dependents; life insurance premiums paid for by the company, your car; professional memberships, and other business-related expenses.
Gives you a big picture.
Some companies mistakenly focus solely on replacing high-level executives. Good planning can go further and force you to examine all levels of employees. The people who do the day-to-day work are the ones keeping the business going. Neglecting to add them to the planning mix could have dire consequences. As you develop your plan, incorporate all layers of management and their direct reports.
Strengthens departmental relationships.
When regular communication occurs between departments, you are more likely to experience synergy. This will no doubt strength the company culture. Make sure that you link your succession planning activities with human resources. After all, HR is about people. By including HR in succession planning, you can incorporate elements like the employee-evaluation process, which can help when deciding whether to fill vacancies with internal candidates.
Succession planning increases morale.
Change—a major component of a succession plan—is exciting and can bring a business unforeseen rewards. Still, change can be a source of tremendous stress, especially when people’s livelihoods are at stake. As you put your succession plan together, consider its positive effects on the business. Planning for the future is exciting and, if done correctly, can motivate your employees and maintain company loyalty. It’s true that a plan is often put into place to avert catastrophe, but it’s also a company’s way of embracing the future—a business strategy that is essential for survival.
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