Many business owners have a common goal: to continue to grow their business for generations to come. But the process of preparing your business for the future once you retire can be intimidating. Who will run the business, and will they be prepared to take over? This is why succession planning is so important for generational businesses. Here are some of the steps you should take while succession planning.
What is Succession Planning?
Succession planning is the process that some companies use to pass leadership roles down when a person retires or leaves the company for any other reason. Succession planning is utilized to make the transition smooth and as minimally disruptive as possible for those who rely on the position that is being changed.
Understand the Needs of Your Company
Having a clear understanding of how your company operates and what it needs to be successful is the starting point of succession planning. Look at all the positions that may need to be filled in the coming years. Learn how the market is changing and how it will affect your business. Where does your company stand in the current market? Find out to plan your succession with the best possible outcome.
Start Succession Planning Early
Whether it is you or another member of your team that might be leaving soon, start the process of succession planning early. Any change in management or ownership is going to cause some amount of disruption within the company but getting the transition process planned out ahead of time can help lessen these disruptions. Make a detailed list of all the person’s duties and how they impact the company.
Select Candidates for the Position
Once you know which positions will need to be filled, start to look for who will take over this position. If your business is family-owned and you are planning on retiring, then you might look to another family member or your children. If you aren’t leaving the business to family, then look for someone within your company that has the potential to take over the role. This goes for any upper-level position that you are succession planning for. Look for someone with the skills or potential skills that match the position they would be taking over. Remember that just because a person may be positioned directly below the person leaving, does not mean they are a good fit for the higher position.
A successful succession plan includes sitting down and discussing the plans with the candidate and learning their goals.
Discuss the Transition with Your Employees
Once you have selected someone for the role, make sure to speak with them to learn if they want the position or if they need additional training to fill the role. Don’t assume that the person will automatically want the position even if they are qualified for it. This also goes for family businesses. Have a backup plan in case the person you had planned to take over the business does not want to.
Have a Trial Run
Allow the person who will be taking the position to take on the responsibility of the job for a trial period. This will allow you to see if the person is able to handle the demands of the job and give them a preview of what they will be doing. This trial run can be done while the current person is on vacation or if they are able to work on something else for a few days. Use this time to determine any additional training or development that will be needed.
Succession planning is essential for any business to succeed for years to come. Whether an owner, executive, or anyone whose position will leave a gap is leaving the company, having someone in line to take over their position helps relieve stress and confusion during the transition. At HR Collaboration Group, we are here to help you in all aspects of business transitions – whether you are succession planning or currently transitioning positions with the company. To learn more about our full-service HR solutions, contact us today.