5 Get-Started Steps for Your Small Business Succession Plan
As a small business owner, you’re crazy busy with everyday tasks that support running a successful company … yet planning for the future is essential to ensure financial stability and growth.
This is where Succession Planning comes into the picture. Succession Planning is a two-fold strategic people/knowledge capture process for safeguarding a company’s future. The “people” part of the process includes facilitating the identification and transfer of corporate skills and knowledge, particularly those that are most critical to the future success of the business. The “knowledge” part determines crucial job roles, identifies and assesses possible successors, and provides them with the relevant skills and experiences needed for current and future opportunities.
Only half of all small business owners have an exit strategy for their businesses in the event of their disability, retirement or death. Those without succession plans cited lack of time, knowledge or resources as reasons. Even though you can’t plan ahead for disaster, you can formulate a well thought-out plan that will ensure a smoother transition of leadership/ownership and ultimately help continue your company’s prosperity.
To learn more about the basics of succession planning and get an overview of everything involved in the process, check out this detailed guide.
Succession Planning often falls under three categories:
When you know and plan for C-suite or other high-level executive exits through leadership recognition and training.
Involves defining positions and designating potential successors to key positions. Includes continual assessment, evaluation and development.
EMERGENCY OR INTERIM
Plans are made to prioritize leadership functions and establish an order of succession to continue operations despite an unexpected transition.
You may be thinking, “But I don’t have the time or resources to think about succession planning,” or “our company is too young to worry about succession planning.” Regardless of whether you’ve made succession planning a priority or not, it really is important to start thinking about it. The sustainability of your company and the satisfaction and success of your employees depends on it.
The most common question from someone new to succession planning is, “Where do I start?” In light of that very relevant question, let’s consider 5 simple steps that can get you started with succession planning right now.
Step 1 – Document current and future organizational structures.
Map out your organizational structure as it is now and project how it might look several years from now. Consider your future goals and the types of leadership and positions you need to reach those goals.
Step 2 – Identify and define capabilities for key areas and positions.
Assess and designate those that are critical to the organization’s operational activities and strategic objectives. Determine specific functions and update job descriptions.
Step 3 – Pinpoint Interested employees and assess them against capabilities.
Meet individually with those who have the interest, knowledge and potential to fill key areas and positions.
Step 4 – Identify knowledge loss risks and priorities. Set strategies for learning, training and development
Develop and implement succession and knowledge transfer plans, preferably with leadership buy-in.
Step 5 – Evaluate effectiveness.
Measure and monitor your succession planning and management efforts to ensure functionality and goal attainment. Consider assigning a process champion who will hold people accountable for tasks related to the implementation plan.
Once you’re ready to go beyond the “5 get-started steps,” there are sub-steps that include more detailed tasks like determining position criticality, assessing retirement risk factor, and developing success profiles. These are areas you’ll dive deeper into once you’re done gathering initial information.
When you're ready to dive deeper into the succession planning process, check out this guide. Or to learn more about how we can help, visit this page about our succession planning services.
Download Our Free Succession Planning Templates
Are you looking for a way to find the right person to take over a position? Fill your talent pipeline? Ensure that valuable knowledge is transferred before it's lost? Or, did someone say the word, "retirement?" Our easy-to-use templates can get you started.Download Templates