Are You Making these Mistakes in Your Succession Plan?
Of course you are busily planning for the next generation who will eventually take over your business…aren't you? Part of every manager's job should be to prepare his or her own successor. There are many companies which will not promote an individual if the incumbent has not groomed someone to take over his/her position.
But in the process of planning for succession, and in the execution of a succession plan, there can be pitfalls. With some planning and forethought, most of these problem areas can be avoided, or handled effectively.
Don't do succession planning without having an effective strategic planning process in place. Without establishing an effective course and direction for the company, it will be difficult to determine the best characteristics desired in managers and leaders. A good strategic plan sets the guidelines for where the company should be going, and how it plans to get there. Within that framework, it is easier to select those candidates which will help carry out the mission of the company as determined by those people in the company who have to carry out the actions which will lead to success in the market place.
Don't put off doing your succession planning. Procrastination can only lead to disarray within the company, should something unfortunate happen to a key player at an unexpected time. Doing succession planning, within the scope of the strategic plan, will provide a level of confidence and trust within a business, that should help everyone to continue contributing to the ongoing success of the company. No one is helped by procrastinating, and the company could well be harmed, even to the point of disaster, if effective succession planning is not done, and done well.
The designees should be trained and educated in the operations of the business, both inside and outside the company. They should learn the markets and customers that provide the company with its business revenues. They should learn who the competitors are, what they are good at doing, and what weaknesses they may have. Inside the company, they should learn the operations of the company, from order to shipment, from product or service development to roll-out and from quotation to invoicing. They need to be deeply exposed to the people side of the business, so they understand the strengths and weaknesses within their own company. They need to learn what sustainable competitive advantages their company has, and how to make them better over time. They likely should have some formal education in business management, finance, marketing and sales, and even in basic accounting as well as production operations.
Succession planning is not just for the heirs of a business. Any key position in the company can be a target for succession planning. Loss of a key person, whether a top manager, executive or a key non-managerial person, at the wrong time can wreak havoc in a small company, and can harm, at least for a short time, a larger company. Look carefully at any and all key slots, and have a good idea how you will fill them if a vacancy occurs. Plan your company's successions and you will help plan your company's successes.
Dan Baldwin is a Senior Consultant at the Center for Simplified Strategic Planning. He can be reeched at
© Copyright 2017 by Center for Simplified Strategic Planning, Inc. Ann Arbor, MI -- Reprint permission granted with full attribution.