5 Key points – How to implement a successful succession plan in your businessPosted by Nicole CoyneOn October 31, 2023

Succession planning has been a hot topic of late with a number of business owners. People who’ve put a considerable amount of time, energy and resources into their business, not wanting to sell it or see it closed down, are looking for successful ways to keep their legacy going. They want to leave the business in good hands ensuring its long-term sustainability and growth.

Here are five things to consider when developing and implementing a succession plan in your business:

Successful succession planning begins long before you actually need it. This should be a point of discussion or priority in your initial business plan. Best case scenario, understanding your exit strategy even before you start the business.

It might sound odd to be working on your exit before you have even started, but it can help you shape how you would like to see the future of the business. The key learning here is that succession planning is not something to be improvised in a crisis or something to be tackled last minute.

However, if succession planning was not part of your original plan, then this is your next best step. Start by identifying key leadership roles within your organisation and the individuals who currently occupy them. Evaluate the skills and competencies required for these positions, that would be technical as well as soft skills. Then create a clear roadmap for potential successors.

In other words, clearly show what skills are needed to move up into the next role. Keep in mind the company’s long-term strategic goals and how these align with your succession plan. For example possible expansion into new territories or future product/service innovation requirements etc.

The heart of any good succession plan is the identification and development of talent. Evaluate the skills, knowledge, and potential of your current employees against the desired requirements you’ve previously set out. Through this evaluation, decide who has the potential to step into leadership roles in the future.

The decision to move into leadership positions will also be the decision of the individual. Ensure that they are willing and motivated to move up the ranks and that they are also aware of the requirements of the role and the commitment to the growth journey.

Once all parties are on board, ensure there is a culture and support of continuous learning and development within your organisation to help employees build the necessary skills. Make this a priority and budget for the necessary resources to be available for development and learning. Consider offering mentoring and coaching programs to help potential successors grow in their roles. Regular performance evaluations and feedback can aid in this process or formal studies for acquiring specific skillsets.

Building a succession pipeline involves developing multiple layers of talent for key positions. This not only provides you with options but also reduces the risk associated with relying on a single individual. Promote cross-training and job rotation to broaden the skill sets of potential successors.

Encourage employees to take on new challenges and responsibilities to gain the experience necessary for leadership roles. In essence, the goal is to create a pool of well-prepared individuals ready to step in when needed.

Besides having a successful pipeline, this plan will also add to your organisation’s reputation, attracting sort-after individuals into the organisation who want to grow, develop and be challenged.

Once you’ve identified potential successors and created a succession pipeline, it’s crucial to document your plan and communicate it to all key stakeholders within the organisation. Ensure that the current leadership team is aware of the succession plan and their role in supporting its success.

Transparency and open communication are essential in maintaining trust and confidence among employees. Regularly update the plan as circumstances change and as individuals within the pipeline progress in their careers.

It’s essential to periodically test your succession plan by conducting mock scenarios or trial runs of leadership transitions. This helps you identify any gaps or weaknesses in your plan and provides an opportunity to fine-tune it. Additionally, be flexible and willing to adjust the plan as needed. Business environments change, and sometimes the ideal successor may change too, hence the need for a healthy pipeline. Be prepared to adapt the plan to evolving circumstances and priorities.

A well-executed succession plan is not just a contingency; it’s an essential part of your strategic business plan. By starting early, identifying and developing talent, creating a succession pipeline, documenting and communicating the plan, and regularly testing and adjusting it, you can ensure a smooth transition of leadership within your organisation.

Succession planning is an investment in the future of your business, helping to preserve the status of being a learning organisation, maintaining stability, and driving ongoing success.