Your Business Neeeds a Succession Plan

Have you created a succession plan to ensure your future business continuity and survival?
Does your business have a succession plan in place, in case your leader is unable to lead? What happens if your current President/CEO, owner leaves or is unable to lead your business? Do you have a succession plan (a formal written document) that defines a specific course of action, should your CEO leave, become incapacitated, retire or pass away?
With the increased complexity of running a business due to constant technological advances, rapidly evolving industry trends and technologies, and the global nature of business competition, you need to have a plan in place to guide you in transitioning your leadership, whether its a single owner/CEO, partners, or an entire management team.
Do you have a succession plan in place already? If so, when was the last time you revisited it, to ensure that it’s still relevant and accurately reflects your current business situation? If not, you are playing a dangerous game of Russian roulette by hoping you don’t need one.
If something happened to your leader, you won’t have the time required to develop a succession plan to guide you through identifying the ideal candidates from outside your organization through recruiting, then interviewing and hiring your new leader. the time it takes to develop a plan on the fly will likely prevent you from successfully navigating through the crisis and your business will likely suffer tremendously if not fold outright due to the lack of continuity in leadership.
So, what’s a succession plan, you ask?
Having a succession plan will enable you to identify employees who are capable of taking over upper and senior management positions. Most succession plans begin by creating a list of qualified candidates and narrowing the list down, until the right person (people) has been chosen. According to Marshall Goldsmith, a well-developed succession plan should emphasize/include the following four elements/considerations:
1.Change the name of the process from Succession Planning to Succession Development: Plans do not develop anyone — only development experiences develop people. We see many companies put more effort and attention into the planning process than they do into the development process. Succession planning processes should develop individuals you identify as possessing the requisite background, experience, values and desire to take over.
2. Measures your desired outcomes, not the process: This change of emphasis is important for several reasons. First, executives pay attention to what gets measured and what gets rewarded. If leadership development is not enough of a priority for the company to establish goals and track progress against those goals, it will be difficult to make any succession planning process work. Second, the act of engaging with senior executives to establish these goals will build support for succession planning and ownership for leadership development. Third, these results will help guide future efforts and mid-course corrections.
The metrics a company could establish for Succession Development might include goals like the percent of executive level vacancies that are actually filled with an internal promotion vs. an external hire, or the percent of promotions that actually come from the high-potential pool. Too often, we find companies measure only the percent of managers that had completed succession plans in place.
3. Keep it simple: We sometimes find companies adding excessively complex assessment criteria to the succession planning process in an effort to improve the quality of the assessment. Some of these criteria are challenging even for behavioral scientists to assess, much less the average line manager. Since the planning process is only a precursor to focus the development, it doesn’t need to be perfect. More sophisticated assessments can be built into the development process and administered by a competent coach.
4. Stay realistic: While development plans and succession charts aren’t promises, they are often communicated as such and can lead to frustration if they aren’t realistic. The bottom line is, don’t jerk around high performing leaders with unrealistic development expectations. Only extend the promise of succession IF there is a realistic chance that they will be chosen.
Here’s to your success in starting a new business in 2013. May it be the start of an entirely new path for you!
Ethan Chazin, The Compassionate Coach