How to create a succession plan: who will take over your business when you move on
A succession plan, also known as an exit plan, outlines who will take over your business when you move on.
A good succession plan enables a smooth transition with less likelihood of disruption to business operations.
Make sure your plan is attainable – set a realistic timetable and measurable milestones – and stick to it.
Succession planning can also apply within your organisation. This involves matching likely vacancies with appropriate employees, identifying gaps and supporting internal promotion. This type of succession planning should be undertaken alongside skills planning so that you can develop a picture of the skills in your business.
Regardless of whether you’re selling up, handing over management operations or planning for internal staff promotion, there are some major benefits in developing a good succession plan. These include:
- the development and long-term retention of talented staff
- the identification of ongoing needs for replacement staff
- identifying suitable training and development programs for your staff
- the enlarging and diversification of the talent pool to fill your key positions
- adding value to your business’ strategic development, by increasing the number of proficient staff fulfilling those strategies
- increased access to the intellectual capital of your employees, which comes from their being challenged to grow in their capabilities
- improved and lasting individual and team morale, and commitment to the business
- greater potential for continued business success into the future.
Whatever your reasons for leaving the business, it’s good practice to ensure that the systems, processes, general operations and workforce don’t fall in a heap once new people take charge and you’re out of the picture. Base your approach on the following factors:
- ensure your staff have an understanding and commitment to an effective succession plan
- be clear and consistent in explaining the business case for a succession plan in the short, medium and long-term life of the business
- work progressively on identifying your current and future organisational and operational requirements
- regularly assess individuals on-job performance and leadership potential, and provide opportunities for them to grow
- put into practice a developmental plan for employees who are included in the succession plan and reward their faithfulness and innovation
- evaluate and revise the plans for operational systems, individuals and teams over time.
When considering your succession plan, think about the implications for your family. It may take longer than you intended to leave, sell or wind up your business. The earlier you plan your exit strategy, the more opportunity you have to include your loved ones in the process and the smoother the transition will be.
This content was first published on www.business.tas.gov.au