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Succession planning ensures a smooth business transition

Succession planning ensures a smooth business transition

The following is the first in a series of articles on succession planning within businesses or organizations. In the coming issues, we will explore the various steps of this critical planning process that will help protect the longevity of businesses and provide professional growth of future leaders.

Congratulations. Your leadership has grown your business and made it successful. You have been dedicated to the business. Because of your experience, drive and ability, the organization has thrived.

However, the time will come, either expected or unexpected, when you will retire, move on to another challenge or no longer be willing or able to fulfill your duties. Have you prepared for the inevitable and developed a viable succession plan to ensure that your organization will continue to succeed long after you are gone?

Succession planning may mean different things to different people. For the purpose of this series, succession planning is defined as the process of developing plans, people, and action items to ensure the continued operation of a business in the event of an expected or unexpected change of leadership.

Although many of us would like to think that we would live forever, the fountain of youth has still not been discovered. Take it from this author who just last month survived a very unexpected and life-threatening condition (saddle pulmonary embolism): You need to plan early and be prepared for the worst. Your business, organization, employees, customers, and even your family are counting on you. But it is not just the unexpected for which you need to be ready. You also need to be prepared so that you and your team can make your dreams a reality, whether that is retirement, pursuing your second career or whatever else you have your sights set on.

Succession planning allows you to begin considering how your organization will continue in the event of turnover in key positions, including your own, and identify possible exit strategies. You could always have an auction, sell the assets, and close the doors, but there is a good chance that the business you are leading has developed value beyond your assets. In fact, your employees, your customers, and perhaps even your family may need your business to continue providing for them long after you ship off to your warm and sunny retirement destination.

But how do you even begin this planning process? Every business will undoubtedly experience unique challenges in fully creating and implementing a succession plan, but the basic process applies to all, which is outlined in the following steps:

1. Assess the business in the marketplace: Start with an assessment of the entire business. How well has the business performed in recent years? What are the trends? What changes are occurring in the industry? Are there new regulations on the horizon that will affect your organization? Who are the competitors? What growth opportunities exist?

2. Assess the talent and identify potential successors: Assess your current employees. Determine who possesses key knowledge, skills, and abilities that make the operation successful. Careful consideration should be given to uncovering any personal agendas that the employees may have and exploring the dedication of individuals to the organization’s vision and mission. Depending on the size of your business, your successor may already be in your ranks, or else you may have to go outside and begin recruiting the right talent to join your team and/or fill your shoes. Once you know what skills your employees have, then it is time to identify what skills you are seeking for your successor and identify any “gaps”. Document these assessments because the information will be useful later in the process.

3. Develop succession strategies: Develop succession strategies that will ensure a smooth transition of leadership. How do you plan to officially designate your successor? How do you plan to train and develop their skills in order to close any gaps previously identified? How do you and your team plan to work with them, mentor them, and stand beside them before you turn over complete control? Your successor needs to be comfortable in his or her new role and with the knowledge transfer that has occurred.

4. Implement succession strategies: Now it is time to take action and implement the strategies that you have developed. Do not wait until it is too late, or you will be rushed to make decisions and implement a transition. Begin preparation early and allow adequate time for your entire organization to adjust and react to the change process that is underway. Communicating critical changes to your employees and customers takes time and is essential for a successful transition.

5. Measure and monitor: The final step is to monitor and evaluate the progress of the transition process. Remember the lists that you documented during the early assessment steps? These are now useful as part of the system for measuring and monitoring your progress through the implementation. Has the new talent developed all the necessary skills and closed all the knowledge gaps previously identified? Do your employees really identify the new talent as the person in charge? Are your customers satisfied with the current level of service? This is a great time for you to reach out to your employees and customers and spend time talking to them and obtaining feedback about how things are progressing. After all, if you have done everything else right, your successor is in charge of the operation now and you should have plenty of time to devote to goodwill.

Succession planning is about ensuring that everyone who benefits from your business will continue to do so, even if you are not around. Regardless of the reason, your employees, your customers, and even your family deserve the very best. It is never too early to begin the succession planning process. In the rest of this series, we will explore the succession-planning steps in greater detail. In the meantime, I challenge you to think about your long-term goals and what the future holds.

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