When your high-performing staff members feel as if they don’t have anywhere to go in terms of career trajectory, they can often stagnate and feel undervalued. This demoralises them and doesn’t inspire them to continue to perform at the level you’ve grown used to. 

This is why succession opportunities need to be clearly communicated from the beginning. This generation of staff members and employees want to grow in their roles and succeed others to step up to more important and impactful ones. A clear career path will help motivate them, ensure that they’re happy and driven, and give them a goal to strive towards.

This is especially important when senior management has to suddenly leave or step down. Your senior management are your right hand men and women in your business. They keep everything running smoothly alongside you. But once they either feel it’s time to retire or an emergency has them otherwise occupied, you need to rely on someone new to take on the role. 

Succession planning will ensure that that process is smooth and hassle-free.

Installing a good succession plan process from the very beginning will help assure you that, in the event that any senior manager has to step down, your business will still stay afloat. Directors  or partners need to watch out for their firms and guarantee their continued growth so any interruption because of a steep learning curve for a new senior manager or a poor transitioning can pose danger for smooth relations either between employees or even with clients.

Succession planning isn’t just for when a new owner has to take over the business, it’s internal too. It includes preparing younger staff for new opportunities to advance their career when the time is right for them to take over key roles.

What is succession planning and how do you do it?

A lot of business owners put so much energy into business growth and success that they often overlook their staff and how they’re faring, especially younger members and which one of them may be qualified to succeed senior management when the latter steps down. This even goes for ownership or your own role when you decide to exit the business. 

Which is why succession planning is crucial to any business. 

Succession planning is introducing a strategy that is established early on with full transparency to your staff that they can possibly take on bigger, more challenging roles in case anything happens or anyone steps down. It’s having the foresight for these circumstances and preparing for them to keep the business running and successful, passing on leadership roles without any friction or fuss.

Businesses that have succession plans integrated into their systems often have more engaged work cultures and foster higher performing staff because they’re more motivated and focused. A business that prioritises this process understands that leadership training shouldn’t have to be so difficult and that you value your staff enough to want them to succeed, too.

While it’s easy to talk about, it’s a lot harder to execute. But these three steps can help:

1. Identify your plans for the business: You need to know specifics like what your vision for the business is, where you see it going, and even when you yourself plan to exit the business. You need to cement crucial business components such as structure, the number of equity owners you envision having, and the key roles necessary to achieve your goals.
2. Create a leadership program: You must identify the most important roles that would need to be filled quickly in case someone steps down and work backwards from there to create a program that will prepare and train other staff members to best succeed that role. It has to work with the existing business structure and provide a clear path to future directorship, partnership, or equity ownership. 
3. Ensure the system is in place and execute it: Continuously check on the training program to see if it’s working and if it needs any tweaking or overhauling while keeping transparent dialogue with the staff so they know they have opportunities ahead of them. You also need to plan your finances carefully in case any financial adjustments need to be made in times of transition.

Why succession planning often fails

It’s not always easy to keep succession planning and talent management front of mind when you’re focusing on different aspects of your business instead, which makes succession planning difficult. 

Many businesses fail to do it for a variety of reasons but these are the most common:

• Poor business structure makes it difficult to bring in new equity partners: A business structure that has shaky foundations will affect every part of the business, even succession planning. Because the business structure isn’t strong, it becomes difficult to attract equity partners because they are turned off by the business’ instability or underlying debt issues. 
• Succession plan not planned, developed, and communicated properly: A lot of the time, succession plans are developed reactively instead of proactively. There is no clear role path or “cradle to grave” competency framework. Therefore, instead of being developed, it’s only done when there is a space through business growth or when someone’s stepping down. 
• Poor leadership with directors or partners that aren’t accountable or behave poorly: If the members who are on top of managing the business are already disorganised and lack a grasp on running the business, there’s no way that they can seamlessly integrate a succession plan when they themselves have no framework they abide by. 
• Timeframes to ownership or partnership are too long or not clear enough: When there is no clear path to grow in the business and you are still waiting for that tap on the shoulder to join the partner or director ranks, you start to question your career path and whether it’s time to look for other employment opportunities. If your high performers are having to wait long periods for advancement because of a lack of business growth, chances are you will lose them in the long run.

3 reasons why succession planning is important

Succession planning will make transitions easier and ensure that daily operations aren’t disrupted. Here are three important reasons why succession planning will help your business through the change. 

1. Your staff feels like their career has a direction and they’re more likely to stay

Plenty of employees want to evolve in their position. The current working generation isn’t looking to do just one thing forever, they aspire to advance their careers. Which is why succession planning, as well as transparency about opportunities, will help bolster staff morale.

Staff feel much more motivated and energised when they know their career is headed somewhere. When your planning can help them achieve their desired trajectory, they’ll likely be more productive and motivated to land a higher position, even if it isn’t necessarily partnership or ownership.

This approach of open communication with your staff has to be personalised and tailored to their business growth. By providing them with feedback and keeping conversations open with them, you and your senior management will get a better understanding of who might be qualified to succeed one of your business’ veterans. 

When staff members see that they have the potential to inherit a bigger role, you will secure their loyalty and keep them from being poached by competitors. A lot of rival companies will see the talent in your staff and if your staff feels as if they’re not growing in their role, they may accept a better offer somewhere else.

2. It protects the business from sudden changes

A senior member having to exit the company because of sudden change or emergency can be nerve-wracking. They already had the know-how and having to replace them requires extra time (that you may not have). But with succession planning, you’ve ensured that someone else has already been developing the skills to take over.

This protects the business from harm as another staff member can take over seamlessly because they’ve learned what they needed to already and they don’t need to be watched too closely. 

3. Provides a smooth transition into new ownership or new roles

When it comes to executing the actual transition of roles, succession planning will make everything smooth and hassle-free. Everything can be prepared well in advance and guides can be laid out for the next owner, partner, or member of senior management. 

On the level of ownership, a director partner should have everything in place as well as good advisors who can guide their successor on how things should be run. Your exit strategy should include everything the next owner, director, or partner should know from finances to systems and everything in between. Remember that it’s a process and not just something you can haphazardly pull together in a couple of days. 

Being clear about succession planning prepares your successor and gives them adequate time to acquire the proper skills to run and look over the business. 

Succession planning can be difficult to integrate because of how personalised it is, but it is truly rewarding in the long run because of how it’ll make transitions easier, make roles more digestible, and keep your business running smoothly and towards success.
If you want to know more about how to successfully implement a succession plan, give us a call.