In a nutshell, succession planning is about the successful evolution of your business. It involves using business development and personnel development to prepare the business for the next generation – after you’re no longer at the helm. The idea is to ensure that the value of the business is maintained and, if possible, actually enhanced, regardless of who’s in charge.
Succession planning is an easy thing to put off. Very few entrepreneurs tackle succession planning in good time – many are simply forced into it because of an impending notional retirement date, ill health or other changes in circumstances.
Here is my Seven-step programme for good succession planning.
- Identify your own preferred route for succession planning. Is your ultimate goal to sell the business? Are you intending to promote a family member to lead the business? Or do you think your employees have the potential to lead the business into the next generation? Consider all the options and identify which one best suits your circumstances.
- Establish where the business is and where you need it to be. You should carefully review and refine the company’s financial and strategic goals. Then you need to identify the systems and processes you need to implement or refine to meet those goals. Also consider any gaps in skills in the business that need to be filled through recruitment or training.
- Look at the leadership skills needed to run the business. Don’t just look for a carbon copy of yourself! Think about the knowledge and skills needed to take the business forward. Also consider what sort of attitudes and abilities make a great leader. Often we think of great leaders as typical extroverts but, actually, very humble, empathetic people make brilliant leaders – just look at Nelson Mandela.
- Look at the talent in the business. Yes, it seems easy to search outside for candidates but first look at your internal pool. Look at which person fits (or has the potential to fit) the criteria you’ve identified above. Remember you aren’t necessarily looking for one star performer – consider a small pool of people who may make a good management/leadership team.
- Get stakeholder buy-in. Involve people at all levels of the business in the succession planning process. Get their opinions, share information and keep them informed as the process unfolds.
- Implement a programme of personnel development/knowledge transfer. Establish a tailored development plan for each individual involved. This may include shadowing, coaching and mentoring, and formal training/development. Set clear, measurable goals and timeframes for this process. It needs to have a clear start point and milestones – it shouldn’t be something that you drift in and out of when you have free time.
- Monitor and analyse progress. Review the development programme on a regular basis. Assess the individuals involved and give plenty of feedback. Also revisit the plan to see whether changes in the business or outside the business may affect the succession plans.
Remember that succession planning doesn’t mean that you’re getting old and giving up! It simply means you’re preparing your business for future success. It’s about the evolution of your business and preparing those who will (one day) take it to the next level.
This post is based on an extract of my book Do More of What You Love: The New Approach to Business Succession Planning, out now.