Do you have a succession plan for your role as a business owner or CEO?
Do you have a succession plan for your executives? For other key positions in your business? For your governance and advisory board roles? Or are you too busy being busy and not thinking strategically?
Succession planning is about more than simply identifying a successor. It’s about understanding what your business will need in the future. What skillset, roles and people will it need to survive and thrive?
Succession planning also attracts and retains quality talent – more than 90% of younger workers said working at a company with a clear succession plan would improve their level of engagement. What are you doing to show your workers they have opportunities to step up?
You need to plan for your business’s success
Succession planning is all about finding the right people for the right roles.
It’s a bit like inheriting grandma’s recipe book. Imagine you and your sister are about to inherit this treasured book. You’ve both been learning the recipes for years, although you’re not really a good cook. Your sister is, though, you know she would appreciate the book and make better use of it than you. She is the right person for the book.
In this case, the succession plan should be that the book goes to your sister. How do you feel about that? No doubt you would appreciate that the book is going to the right person, knowing your sister will eventually pass it on to the next right person in the family.
Communication is key
I’ve worked with so many business owners and CEOs who have identified their successors, yet never sat down with these people and told them of their plan! It’s not uncommon for senior leaders to leave a business because they didn’t believe they had a future there.
Communicate your succession plan with your successor. Have annual performance coaching conversations and ask your successor where they want to be in three years, five years, and make sure you let that person know of your plan for them.
Understand who needs to know of your succession plan and when. Yours might be a three-year plan. Keep in mind it can take two years to get a person up to speed, and the cost of recruiting a new employee is typically two times a salary. So, waiting 18 months or two years to communicate your succession plan with the necessary person may be too late!
Remember to balance transparency with confidentiality. Focus on position, not people. What positions will you need in the future? If you’re a larger organisation, you should always have a fair and transparent recruitment selection process.
Career development is critical
Annual performance reviews and performance coaching conversations are key to an effective succession plan. Ensure all staff know how to transition from one position to the next. They should understand the career plan and capability framework for each position.
People want to be upskilled, they want training, and they want to know how to get to the next level. Succession planning can boost morale and drive engagement.
And remember, the people in your succession plan don’t have to be exactly like you. They may bring different skillsets that complement yours, so you can upskill them in what you’re good at while leveraging their existing skills. The result is you will get people who are even better than their predecessors.
We recently worked with a client who had identified the need to succession plan their duties as a CEO to a COO. The COO they recruited had a completely different skillset to the CEO. The succession plan was a three-year strategy, so the CEO will be able to upskill, coach and mentor the COO into the CEO’s role during that time. Because the COO will have two skillsets, the business will have a more effective, more capable, more competent CEO.
Once again, fail to plan, plan to fail. If you’ve done yourself out of a job and created an executive team that can operate without you, you certainly do have a saleable asset.
If you need help creating your succession plan, email [email protected].