Succession Planning is Critical to Long Term Objectives
Is your company prepared for a successful transition of leadership down the road? Whether you are a company of 2 or 200, succession planning is a critical part of your company’s long term objectives. For a Small Medium Enterprise (SME) especially a family owned business, this can be a challenging process. Entrepreneurs have a strong emotional attachment to the business. For this reason, they may have difficulty in accepting the idea of giving up control in the future.
Just as we plan short term and long term business objectives, succession planning is equally important in the big picture and goes hand-in-hand with strategic planning. Studies indicate that only one-third of family businesses have an appointed successor. Even less have a documented succession plan for senior roles. The first step is for the owner or CEO to commit to the process and work with the leadership group of the organization to develop a plan. If there is a board, the board should also be enlisted in the process.
Talent Assessment & Development
There are many things to consider; one of the first things to tackle is a talent assessment. You must match the current talent to the future needs of the company. This is regardless of whether the plan is to sell the business or to relinquish control to a new leadership group. The talent assessment identifies areas of strength, gaps, and opportunities for development. The most effective plans are married to business strategy and will identify future needs or positions that do not currently exist.
The initial assessment leads to development of talent. You must closely monitor this part of the process. It is a best practice to take a pipeline approach and integrate it with other HR areas such as, performance management, and recruiting. In addition, there must be a commitment to time and resources. That can be a deceptively simple statement for an SME. However, it is imperative to take the time to plan ahead while there are options and the ability to create something to protect the interests of all stakeholders.
There are many tools to assist in the talent assessment process. The key to success lies in commitment, and consistency in the execution of the plan. Leadership owns the process and must hold themselves accountable for meeting the challenge and reaching the desired outcome.
If you are a current ESC client and wish to learn more about this process, contact your ESC HR consultant.