Succession planning is about having a strategy and process for managing inevitable changes that will occur when key people leave your business, and/or navigating a change of ownership event.
Succession planning involves three key components:
No business owner pours their blood, sweat and tears into growing a business for years, only to see it undervalued, unsellable or unable to be successfully handed on to the next generation. Similarly, no smart investor will back a company that doesn’t have succession and contingency plans for the future.
Many businesses avoid succession planning altogether, fearing it will be a difficult and expensive process while other companies consider their ‘succession plan’ completed after deciding on their next CEO.
Designing a proper succession plan does not have to be painful or unpleasant. It should, in fact, be a process that’s revisited often by boards, business owners and executives, amended accordingly to align with your business’s strategic direction and carefully planned to provide guidelines for current and future employees.
A strong succession plan should not be a plan for the replacement of just one high-level employee but rather a framework for developing leaders within your business and moving them into positions that will drive sustained high-performance across your organisation.
Succession planning keeps your business ahead of the curve and is a prime responsibility of any board. Done well it creates a mindset of continuous executive development and risk management that saves time and headaches over the longer term.
It is an important factor for attracting and retaining A-grade talent, who place the highest value on succession planning when they choose where they want to work. In turn, it provides a better framework for understanding and managing talent.
Businesses with capability in succession planning enjoy over 140% stronger revenue growth and 160% higher profitability than their less capable peers, so it’s worth getting right.
To find out more about how succession planning provides a framework to drive sustained high-performance across your business, call us today.Get in touch