Whether you own a small or large business, at some point, you will need to consider your exit strategy from the company or your key employees’ departures; this is where Succession Planning is crucial. Succession Planning is a strategic guide to the exiting of the company and evaluates all aspects of the current and future business. It involves selecting the future leaders and key decision-makers of your company at all levels.
Here are some essential tips to consider when it comes to Succession Planning:
Sourcing and developing a team member to take over a key role in your business takes resources and time. No company is immune to being caught off-guard by an employee’s departure. However, generally, you will know in advance. Suppose a team member has given you their notice of departure. In that case, you must start immediately considering how their departure will affect the business’s operations, the impact on the company and how you will find a suitable candidate to replace their position.
Developing a Succession Plan:
Developing a strategic Succession Plan is a complex process. There are many factors, both internal and external, that will need to be considered including; emotional, tax, financial, legalities, stakeholder and equity matters. Essentially, your Succession Plan is a blueprint that will need to cover all areas of the business and a guide that employees both present and future can rely upon as the company enters the new stage.
Developing a Successful Succession Plan takes time and specialised knowledge in exit strategies. It’s recommended to utilise a professional’s services that will take a comprehensive approach in developing your Succession Plan. At UpCoach Business Coaching, we have helped hundreds of business owners at every stage of their business journey, including Succession. We carefully consider all factors and devise a thorough Succession Plan that honours your personal and business values, as well as the legacy you want to leave behind.
Identifying Succession Candidates:
Identifying and training employees over a period of time helps to ensure you have potential candidates ready to step into key roles after the departure of an employee. It’s imperative that you consider all promising candidates who have the necessary attributes and attitudes to thrive in higher-level positions, not just those that are ‘next in line’. Investing in employee training also helps mitigate the impact of their departure and helps reduce the reliance on key personnel during the transition period; this means your business is less likely to be impacted if you are caught off-guard by an employee’s sudden departure.
The Succession process can reveal many different emotions and uncover various issues within the business, particularly if you have a family-run company. Some challenges include:
- Limited capital
- Differing goals
- Sibling conflict
- Ownership, board members and investors
- Resistance to change
Having a professional Business Coach on board to assist in developing and implementing the Succession Plan and supporting you in the process can help alleviate some of the tensions common with Successions.
Ideally, you want the Succession Plan to ensure that your business is left in capable hands, with as little disruption to the business operations as possible. Some tips to ensure the transition goes as smoothly as possible:
- Be proactive.
Don’t be caught off-guard; start an employee development program to help identify and develop potential candidates for key roles.
- Do a trial run of your Succession Plan.
Further, assess whether an employee is a suitable candidate for a high-level role by implementing a trial run. This allows you to see how they handle the role in a real-world scenario, while also providing you with the opportunity to identify other training areas and iron out any kinks.
- Invest in employee development.
Further developing and diversifying your employees’ skillsets is highly beneficial to your company, and further safeguards your business against disruptions caused by an employee’s departure.
- Integrate your Succession Plan into your hiring strategy.
Identifying any talent gaps in your business will help concentrate your recruiting efforts to fill those gaps.
- Consider all aspects of the business, current and future.
A Succession Plan is an exit strategy blueprint which requires a comprehensive approach that considers all factors of the business, future and present.
- Ensure the Succession Plan is a fair process for all involved.
Emotions can run high when it comes to restructuring and exiting a business and matters involving operations, finances and positions may arise. It’s essential to consider family, board members and investors in the process.
- Get a professional Business Coach to develop and help implement the Succession Plan.
Having a professional on board who has extensive experience in facilitating Successful Successions ensures that nothing is forgotten and that the process runs as smoothly as possible.