A Clear Roadmap for your Succession Planning
Many organisations, small business and family-owned businesses face challenges when transitioning due to a lack of proper ways to tackle succession planning. There is a loss of decades of knowledge and experience when a key employee departs or retires. This is then followed by a turbulent transition which in many cases interferes with the future of the business. Just as UK now has a roadmap for coming out of lockdown, a business owner must also have a clear roadmap for retirement. This will go far in ensuring the success and stability of the business into the future.
What is a succession plan?
A succession plan involves devising a strategy concentrates on identifying and developing future vital leaders that will be successful for your company after you and other key employees retire or exit the organisation. With a solid succession plan, your business can prepare for all the contingencies by having high-potential workers already trained for advancement. Following is a brief overview of what you should be thinking about to kick-start your succession plan.
Have a proactive plan
A proactive plan involves coming up with a structured roadmap that defines the future of your organisation. In the plan, employees who are likely to be the part of the succession plan will engage in new responsibilities or extend their current roles as per the plan. To succeed in this, first ensure that you establish critical roles in your business and answer the following questions:
What are the daily impacts of position x in your business?
If employee Y leaves the position, how would it impact the business?
After defining and understanding these questions, know that the system takes time to get into place and always be flexible. Begin with the basics, and position work towards gradual improvements.
Identify the successful candidates
Once you identify the effects of your retirement or departure of an important employee, it is time to pinpoint a suitable candidate that will step into the positions. It’s also good to note that it is very risky to only concentrate on your business’s top levels. Ensure that your plan takes care of your business, both vertically and horizontally.
While in most cases the person next in line to you is the perfect replacement, do not discount other promising employees. Ensure that your plan thrives towards having employees who have the skills necessary to succeed in higher positions, regardless of their current position.
Make the process transparent and open
Arrange meetings with each protégé and inform them that they are part of the succession plan. At this point inform them there are no guarantees and the situation may change due to new developments within the business.
Develop through experience
Training can help transition the candidate, but there is no substitute for hands-on experience such as job rotation, special projects or action learning. Also, ensure you connect the candidates with mentors to boost their abilities in the critical area of soft skills.
Try the succession plan
Do not wait until you retire. A successful roadmap for retirement includes ensuring the succession plan is verified through actually implementing it as a trial and measuring its outcomes. Ensure that the successful candidates assume the responsibilities of the employee that is exiting the business.
The employee will be able to gain experience associated with that role, and he/she can build on that going forward. At this point, you will be able to assess whether the candidate requires extra training and/or mentorship.
Document the plan
For consistency and elimination of any possible confusion, it is imperative that the whole process is documented. The most credible source of information is the candidates themselves; they understand their capabilities and future ambitions. However, it is also crucial to make the plan as realistic as possible and not be swayed by any biasness for the business’s future.
For anyone wanting to discuss a road map for the succession of their business and the financial implication of what is outlined above please contact Claire at FH Manning Financial Services by emailing email@example.com or calling 01507 527383.
Request a Free Consultation
Please click the link below to book your free consultation with one of our specialist advisers and start your path to financial freedom today.