Building a succession plan for success

Words Knowledge, learning, experience, skills, ability, growth, training, competence and skills on different coloured backgrounds with hands shaking in the background

 

The longevity of a business can be put at risk if you don’t effectively manage your succession planning. Loss of key staff or directors can cause investors to lose faith, stock values to fall, other employees to leave due to uncertainty and ultimately effect your brand and reputation if it is inextricably linked to that individual who has left.

So, let’s start by building a succession plan for success:

Bigger picture

It’s not just about the one person who has left, it is also about the gap created by the employee who will now take that vacant role – are they then replaced by another colleague or recruited externally? A pipeline of talent is required at all levels of your organisation, from initial recruitment, through training, performance management and eventually on to when that person then leaves the business. Being aware of the bigger picture means your plans are likely to be more effective and not cause one problem by solving another.

 

Legalities

Ensure that when you recruit someone that your contract and covenants protect your business from anti-competitive behaviour. The last thing you want is someone leaving and then taking all your clients to set up a rival company off the back of your success and hard work.

 

Know your top performers

Start to make a note of the people who outperform their colleagues, those who are particularly talented in a specific area or go the extra mile to deliver their objectives. This allows you to have a ready made list, should a management position suddenly open up, of potential candidates who have the skills to thrive in a higher corporate position.

 

Two minds are better than one

Share your succession planning with other managers and HR, especially when discussing the company’s strategy. While you may have a good overview of the business, your colleagues will also work closely with many of your team and be able to identify individuals with potential that you may not have noticed. They can also help spot issues, talent gaps and often provide a heads up if someone is looking to leave.

 

Skill development

Utilise those top performers you have identified and help them to hone their skills so that they can be ready to move up the career ladder when the time comes. This could be through training schemes, job shadowing or mentoring programmes. It’s not just about technical skills it is also about their ability to deal with people, communication skills and to maintain their wellbeing in a stressful environment.

 

Do a trial run

When a key person takes annual leave, use it as an opportunity to see how a potential successor would fare in that position. Have them assume extra responsibility and attend meetings that they may not have had the opportunity to be involved in previously. The employee gains valuable expertise, and you get to see how ready they are for a more responsible role in the organisation.

 

Flexibility

Your succession plan should be amended and remain flexible to adapt to the changing needs of your company. Continuously evaluate your talent pool against the requirements of the business and adapt your plan as necessary. Failure to do so could mean that your succession plan is of no use when the time comes and you could risk the reputation of your business by not managing the situation effectively.

 

Key person protection

If you have people or an individual who is the core of your business, then it may be prudent to consider key person protection. This offers you financial assistance to mitigate the loss of that person, through recruitment, training and any other costs associated with the loss of a key person.

Remember, it’s not just through someone resigning that you may have to deal with the issues of succession planning. Tragedy could strike, and you lose a strategic person due to death. Not only do you then need to replace them but may have other financial implications to consider such as loan repayments or what happens to their shares? If you as the business owner passes away, how does it affect your family? Do they rely on that income to pay the bills? Can the business continue or is it the end of their income? Contact us today for a free chat to find out how you can provide financial protection for your business and also your family, you might be surprised at how affordable financial peace of mind can be.

 

Further information

If you found this information useful you may also want to check out the following:

Protection planning for the self employed

Do you need key person protection cover?

How can your company provide you with financial security?

7 ways to prepare your business for 2019

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