Why you need succession planning whatever the size of your business
Perhaps unsurprisingly, succession planning can tend to focus on those in senior positions. Having a substantial position open or uncertain can be disruptive and in some cases even affect a company’s share price.
Conversely, getting succession planning right – particularly at the executive and board level – can bolster corporate reputation, along with customer and investor confidence.
But most businesses also have people in positions that might be low-profile yet who are essential to its success and should be picked up in key man assessments.
Your company could, for instance, rely heavily on a tech wizard or an exceptional scientist who has never fancied a role in management and, unlike a CEO, is rarely in the spotlight. Just think of the panic most of us feel when our computer crashes and we discover that the techie we rely on is away for a few days. So make sure your succession planning include these types.
Also, succession planning is not just for large organisations; in fact, the smaller a business, the greater its dependence on remarkable people. Yet studies indicate that most SMEs do not have a clear succession plan in place for all their pivotal roles.
Some SMEs, however, do think about staff departures and take pre-emptive measures, primarily by ensuring that employees see a long-term future in the company. In new companies and start-ups, this will likely involve giving staff equity.
Here are a few broad brushstrokes to getting succession planning right. (If they seem rather obvious it is because they involve a lot of common sense).
- The person due to leave their post should mentor a successor, closely nurturing their knowledge about all aspects of the business. Those in the most senior positions should also consider letting their understudies sit in on management or board meetings.
- But many high-profile departures are sudden, allowing no time for a handover. So HR should always have up-to-date job descriptions for each key role, and more than one person holding essential information and knowledge if possible.
- Organise practical, tailored work experience relevant for future roles. Hands-on experience is as important as training and development activities.
- As the succession process advances, the incumbent should begin to delegate increasing levels of responsibility, particularly decision-making power, to their successor.
Succession Planning Helps Talent Retention
Some companies have a “rising star programme”, designed to spot up-and-coming talent early and then fast-track it along their career paths.
Research shows that some three-quarters of high-flyers say that being formally identified as potential leaders is very important to them. This has a significant impact on retention, particularly when time and money is invested in training and developing them for their future role. If someone is made to feel valued, supported and rewarded, they are likely to want stay.