Why Succession Planning Is Worth Its Weight In Gold
- Brainz Magazine
- Mar 22, 2022
- 4 min read
Written by: Christine Nicholson, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Succession Planning
“Succession Planning often results in the selection of a weaker representation of yourself.”
‒ Peter Drucker
Why do you need a succession plan?
There is a 100% chance that you will leave your business one day, sometime in the future. When that will be is anyone’s guess.
The one thing that business owners tend to forget is that they aren’t immortal. Let’s face it, not just business owners forget this. Over 50% of business owners leave their business because of unplanned circumstances – death, disease, disability and, sometimes, divorce. The first 3 are the big ones. How well equipped you to leave your business has an enormous impact on its future value of it. It’s worth asking “What would happen if I wasn’t able to work?”
Effective succession planning makes sure a company always has the right team in place just in case there are any unexpected changes, especially to the leadership.
Failing to plan for succession leaves your business worthless and in some cases that can mean literally worthless.
Succession planning builds resilience and adaptability. A succession plan is good insurance against the unexpected and, while it is time-consuming there are significant benefits for your business:
Risk Management
Succession planning is the equivalent of an insurance policy for your business. You have no idea what might happen tomorrow – to you or your family – so having a backup plan is worthy of the effort. Equally, you might have a great team right now but what happens if one of your key employees decides to go to Tibet to “find himself” or leave to set up their own business. You can’t stop them from leaving but you can be ready.
Think of succession planning as maintenance for your business, in the same way, that an airline always maintains their aircraft even though they very rarely crash. With succession planning, you are looking for the next leaders in your business and spending time getting them ready for when they need to step up.
Increases Employee Engagement
Engaging with employees and letting them know there is a plan for their progress encourages them to share their aspirations with you.
Employees can decide whether that is the route they wish to pursue and develop new skills in advance of the change in role. It’s a great motivation and retention tool which cuts your recruitment costs if you get it right.
If your existing team has no wish to progress or they simply don’t have the skills and attitude, you can make plans for external recruitment. With a succession plan, you know what you are going to need in terms of people and how to invest in your existing team to develop them into the roles they aspire to.
Succession planning goes hand in hand with in-house mentoring and the development of employees. As junior members of the team are developed into senior roles, they can ask questions about how things work – and why. This means that there is a review of processes and procedures through challenge and questioning and junior members of staff bring new insight into the organisation's established practices.
Reinforces Company Culture
When you recruit from within you are reinforcing the company culture, behaviours, and legends. The caution here is to reinforce positive cultures. Whilst there are benefits to bringing in “new blood”, maintaining values and being dialled into the purpose or mission of the business is often easier from within.
Strategic Planning
If you build a succession plan, the chances are you are looking at all the strategic aspects of your business. You’ll also engage with your employees at a level that is not normal in most small and medium-sized businesses (or many large ones for that matter). Communication with your employees on all matters is one of the keys to success.
With a strategic plan which sets out goals and targets that are communicated to your team, you are already in the top 20% of all businesses. With a team who understand what they need to do to have a positive financial impact on the business and how achieving it affects them, you’ll have a business that is worth more and give you and them a richer, happier future.
Creating a career development path for employees to take over from their senior colleagues means years of hard-earned knowledge about the business won’t walk out of the door if there are retirements, leavers or, at worst, unexpected events of a more tragic nature.
A succession plan helps your company grow while you reduce vulnerabilities in the business, improve processes, encourage innovation, develop team potential, and reduce employee turnover.
Christine Nicholson is a multi-award-winning Business Mentor, author of 4 business books, a regular keynote speaker and a businesswoman who has built multi-million turnover businesses over the last 30 years. She’s started several successful multi-million turnover businesses, as well as business ventures for others, including taking one from bankruptcy to an 8-figure exit in 18 months. She has spent a few years accidentally running a zoo! Find her at www.businessmentoruk.com
Christine Nicholson, Executive Contributor Brainz Magazine
I am Christine Nicholson, an author, speaker and award-winning Professional Business Mentor who works with multi-million turnover business owners of technology, engineering or product/services businesses.
I'm UK Business Mentor of the Year 2021 and a Global Top 50 Woman in Accounting. I've appeared on BBC talking about business!
christine@christinenicholson.co.uk
0333 567 8011
