Succession Planning: How to Ensure Your Exit is Successful
What If? Let’s be honest, succession planning is not a topic that comes across an entrepreneur’s mind frequently. After all, we’re all occupied with creating successful ventures. But let’s imagine for a second, after years of effort, you suddenly become ill, pursue opportunities outside of your professional career or just feel it’s time to step down. Your company may be in good shape, but is it positioned to operate successfully without you as its leader?
It is difficult for the busy owner of a mid-sized company to make a serious effort toward succession planning and start-up entrepreneurs contend with a roller-coaster ride that divides and challenges attention every day—never mind straining to focus on the distant future toward something called Succession Planning. Nonetheless we’ve already seen the disaster levels escalate when there was no succession provision as we reported in the case of Microsoft’s Steve Ballmer’s abrupt exit—minus a replacement CEO prepared to take the helm.
THE “NOW IS BETTER THAN LATER” STRATEGY: The importance of succession planning is such that it requires careful thought, far in advance, about the resources you will need to develop in order to ensure your successor will carry on the vision you’ve taken years to advance. Think of it another way: planning for succession means planning for success and the sooner you start planning, the sooner you can secure the objectives that effective succession planning requires.
RESOURCES Roughly 60% of first level managerial positions and 52% of senior positions are hired from within. Recruiting from outside the company can also run up expenses in record time and may take a year or more before the right person appears. In the meantime, the company is at risk without a take-charge individual in the wheelhouse, steering the course, perhaps during a trying time made worse without expedient action to fill the office.
Then there’s the “getting acquainted” factor—orienting the new individual to the work, company culture and personality. Which may not be easy when internal management has been “passed over.” Those who have been with the company for years couldn’t help but feel a negative effect on their morale, unless they have somehow been properly prepared to accept an outsider.
STRUCTURING THE FUTURE TODAY To address the resource dilemma, there are two main processes that lead to effective planning:
Establish a depth of commitment within the company that spells out HR required standards of quality and officially burdens all managers with developing and having their successors in place.
Encourage employees to remain in the company by creating a proactive program of performance objectives and reward achievement to develop a strong back bench of candidates, one of whom is ultimately your choice for the next CEO.
PROFESSIONAL SUPPORT ENSURES SUCCESS To prepare our clients with the most appropriate planning strategies Talley & Company delivers expert counseling to entrepreneurs, C-suites and management groups. Providing them with training, tools, and resources allows them to monitor a flexible road map, based on the company vision, while their business grows toward the time when they can position the best successor their organization needs to continue to thrive.