Organizations often miss the importance of a strategic succession plan. Frequently, you find this true for a family owned businesses and organizations that are close like a family. Emotions come into play and end up pushing out a plan for the future. Tough discussions must happen rather than approaching a succession plan with the path of least resistance concept.
Companies that are family run or operate by those with extremely close relationships tend to have underlying personal agendas and frustrations that easily arise between the team.
In business, things just have to get uncomfortable sometimes. If you continue to steer clear of necessary conversations, then your business and relationships will ultimately suffer. Having a firm succession plan in place is essential for your company and it’s possible if you follow these seven steps.
7 Steps for an Effective Succession Plan
- Specific ownership goals – You must clearly define and write down the long-term goals of the company. What is the plan for future ownership? Be sure to sit down and discuss these at length as a team and encourage transparency during the conversation.
- Set competency goals – As a group, talk about what is required competency wise in order to get the job done. Figure out which person among you has the greatest ability to do what it takes in order to ensure your succession plan makes sense and not hinging on people’s feelings.
- Assess management strengths – Utilize assessments to figure out the competencies of each manager. Study what you see as far as their strongest skills and emotional intelligence in order to decipher the best strategy. There are some great tools available to help you with this task.
- Review assessments – After each manager has taken the assessments, be sure to debrief and review them. What opportunities are they best suited for in the company? How could you help them progress in their career? These are a few of the questions that should be considered.
- Legal advice – Seek out wise counsel when it comes to legal advice. Transferring ownership has tax implications and legal situations that must be done correctly. Do not cut corners with this step.
- Performance management – As a company, your management team should be well trained. They need to be held accountable for specific goals and outcomes, so be sure to set a system in place.
- Name the successors – In a succession plan, you must be very clear and have a discussion with the named successor and help them visualize this potential career path. Be clear, specific, and direct in order to hold onto your top talent for the future.
Good decisions and a carefully planned roll out will help a company thrive during the transition.v
~ Written for us by our associate Gary Sorrell, Sorrell Associates, LLC. Copyright protected. All rights reserved