Succession planning is a multifaceted process. There are many people involved: owners, c-suite executives, advisors, management team and employees, to name a few. It takes focus, development and time. Incorporating various business disciplines requires you to:
Strategic planning takes into account the three key components of the business advisory wheel: human capital, systems and accountability. If this work is done, the results go beyond succession planning. Your company will have a proficient and accountable business culture with employees who are well equipped to meet current and future challenges.
Within any succession plan should be a list of potential trigger events such as death, disability or retirement of an owner or key employee, unexpected departure of stakeholders, or a substantial change in profits or operations. Planning for change is tantamount to planning for the future.
Make sure that your succession plan can be implemented by verifying that it is both financially and legally sound. You must be sure that the plan meets your objectives and has legal standing.
Create a detailed summary of the succession plan. At the time of transition, the summary will give company leadership, stakeholders, customers, lenders and suppliers a clear vision of where the company is heading and assure them that the business will remain stable.
Your plan should be periodically reviewed and updated as necessary, and a formal process should be in place for choosing successors. A properly crafted and implemented succession plan can deliver exceptional value to all those involved.
What will be the legacy of your leadership team?