Why Succession Planning is so Important

In a previous post, 10 reasons why businesses fail, I made mention that constructing a business plan was crucial to ensure success. Also in this post mention was made that a proper systematic and standard process needed to be put in place to find and employ new staff again to give the business greater opportunity to succeed with the right people in the right positions with the right skills. I hold the firm belief that people are a businesses most valuable resource, after the owner. Without good people a business is unlikely to be profitable or have the ability to grow or embrace and adapt to changes in the marketplace.

What would happen to businesses if owner/s were not there to provide guidance, motivation and make decisions? In most cases the businesses would operate very inefficiently or possibly even go insolvent. It is critical to draft a succession plan where key staff are identified to take over key functions within the business in the event that the owner is not available or incapacitated for a period of time.

So why bother with succession planning? There are a number of advantages when identifying talent from within the business. These are people that are intimately familiar with the business culture, strategies and plans and would be able to continue implementing and executing them. Bringing in external talent is time consuming and relatively expensive. It would also take time for an external candidate to be trained and inculcated into the businesses unique culture and methods of doing business.

So where to begin? The first thing that should be done is an analysis of the current talent in the business. If there is insufficient talent inside the business then a plan needs to be drafted to acquire it from external sources. This could be done though head hunters or advertising a vacant (or new) position which would be developmental in nature. Another starting point is to identify talented individuals at the time of hiring them.

The next step would be to cultivate and nurture the talent. A plan needs to be constructed around each individual where there strengths and weaknesses are identified and where opportunities are then created where these individuals could acquire the required skills, knowledge and experience. At this stage the plans would be flexible and reviewed regularly, as staff leave or where performance changes.  It is important to realise that not every talented employee can become a great leader. It may be that an average performing employee has the leadership attributes needed to lead the organisation. These plans would not be shared with the identified employees.

Where progress and performance meet the required standard and as those individuals progress to the next stage in the process, generally where they hold a senior position in the business, then it advisable to share the plan with them. This would allow them time to adjust to their future opportunities and responsibility. It is at this stage that a few individuals would be working closely with the owner of the business so then if they needed to take over the day-to-day management of the business it would be a smooth and painless transition.