Succession planning is about having a strategy and process for managing inevitable changes that will occur when key people leave your business or there is a change of ownership or structure. This includes navigating the challenges that come with business growth so that business owners and leaders don’t become victims of their own success.
This 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 buy into a company that doesn’t have succession and contingency plans for the future.
Many family businesses avoid succession planning altogether, fearing it will be a difficult process. Other companies consider their succession plan completed after deciding on their next CEO.
Designing a proper succession plan requires a core capability and process rather than being viewed as an event. This requires regular review by boards, business owners and executives, with plans amended to align with your business strategy and exit plans.
Succession is an important factor for attracting, aligning and retaining A-grade executives, who place a high-value on succession planning when they choose where they want to work. In turn, it provides a better framework for understanding and managing all of your talent. For succession discussions with key people, our 5 box succession planning matrix provides a helpful starting point.
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