Creating and managing a succession plan consists of creating a systematic, integrated approach that identifies, develops, and retains talent in alignment with both present and future business objectives.
You must develop a talent pool to ensure that key roles and areas concerning your organisation’s long-term goals and ongoing operations are filled, and that employees will have both the core competencies and skills they need to perform in these positions when they open up.
10 strategies to create an effective succession plan:
1. Start now
Many organisations ignore succession planning until an employee approaches retirement age, which often leads to a rougher transition upon their exit.
2. Have open, honest conversations
When an employee is planning to leave, find out what their plan is. Determine if they’re looking to leave immediately or continue working for as long as they can. Explore their options and possibilities, what works for management, and what they would like to do. Creating an encouraging, open environment for these discussions best positions all sides for success.
3. Utilise their talent
You don’t want to lose knowledge, connections, or skills when an employee leaves your organisation. If you will soon be replacing someone in senior management or a significant business leader, find out if they would be willing to train the person succeeding them in a support role, or if they would be willing to mentor them as-needed in the future.
4. Develop your talent
When a leader retires, your deputies may not be entirely ready to take on their roles and responsibilities. When you identify a deputy who you believe will perform well in a leadership role, help them continue their education, develop their skills, and give them leadership training in advance of retirement. Combined with early opportunities to make decisions and coaching by current leaders, this can help turn succession into a much easier process.
5. Continue developing your older workers
Older workers often need help with technology, Web apps, and social media, while reverse mentoring can help freshen skills and hone their talents even further.
6. Be open to ideas
Succession doesn’t always go as planned, and it isn’t always simply a matter of finding a successor and planning a transition. Be open to possibilities and changes in your plan.
7. Family succession isn’t always easy – or ideal
Many family businesses struggle to smoothly pass down ownership from one generation to another – especially if the next generation is interested in other work or pursuits. By having honest, direct conversations with family members as early as you possibly can, you can create an ideal succession plan that best suits you and your Boardroom’s needs.
8. Let go
Many business owners – especially those who have been there from day one – struggle to move on from their business. Often, they make emotional decisions, fail to pass on critical knowledge, or don’t focus on necessary coaching. By bringing in an independent, honest, and objective third party, you can streamline the planning process and reduce the risk of clouded judgement.
9. Let the process take time
Succession planning isn’t easy to do alongside day to day business operations. Work on your succession plan over a long period of time, and a little at a time. Have frequent conversations, take small actions, and craft a plan that suits your business at your own pace.
10. Flexibility is key
You don’t need to hold exactly to your succession plan once it’s been completed. Consider it an ongoing conversation to best suit your business’s needs, rather than a contract that must be strictly adhered to.
How does Employee Ownership compare with other succession options?
The Essential Guide to Scale Up Challenges
Learn about how to overcome the challenges when scaling up your business
Other strategic challenges you may be facing:
❖ Management Structure – ensure that your business’s operational structure works for you. A well managed business will reduce overheads, improve employee retention and productivity, and help your business grow. Scaling up needs a well built structure so you can grow freely.
❖ Mentoring – learning how to run a business is a process that never stops. Mentoring can help you learn what you need much faster than letting it happen naturally. Their experience can support you through the new challenges of scaling up.
❖ Remuneration – executives need compensating for their time on the Board. This isn’t a decision to be taken lightly and needs careful consideration to find the right package for your Directors. You want to stay competitive without costing the business more than it can afford.