No matter the size, scope or age of an organization, it is wise for business owners to have a solid succession plan in place. While some natural succession might occur – assistant managers becoming managers, for example – it is important that business owners take a careful look at staff and the future needs of the company.
There are certain mistakes that managers make, however, that can completely derail a well-developed succession plan, including:
- Don’t assume you know your employees: The central factor in any succession plan is identifying which employees will fill what roles. Slotting talent in the correct position is a determining factor in the success of your organization. Where many business owners go wrong, however, is in assuming they know their employees’ plans for the future. Installing a trusted employee as the next Vendor Solutions Manager without realizing that worker has no interest in the position or is planning a cross-country move next year, could be disastrous.
- Don’t assume an informal strategy will be sufficient: Succession planning should be a formal plan on paper and discussed with key managers. An informal plan or verbal agreements should offer no comfort or peace of mind. Unexpected vacancies or unplanned business growth could have a devastating impact if a thoughtful succession plan is not committed to paper.
- Don’t overlook the importance of performance management: Performance management often goes hand-in-hand with the overall succession plan. In many ways, continuous performance management can help identify and train employees at nearly every level of the organization. Additionally, communicating your plans and goals to each employee can help inform the plan itself.
Drafting and implementing a successful succession plan is a continuous task. Many owners believe that these documents can be created and filed away. Unfortunately, the staff, training levels and needs of the business are ever-changing. It is important to create a succession plan and schedule regular reviews to determine if revisions are necessary.
It is wise to seek the guidance of an experienced legal professional when developing your business succession plan. Whether you are creating the plan as a part of your estate plan or are concerned about the future stability of your organization, an attorney can help.