A sound succession plan is an integral part of any business venture. This relates to the process of identifying and training the second like of command, who will eventually move on to leading your business in the long run.
It is not just family-owned or bigger conglomerates – every business, be it big or small, needs a sound succession plan to ensure business continuity or to carry on even when there is a crisis. Here are a few things you can keep in mind when it comes to putting a good succession plan in place.
Identify potential candidates:
The foremost step is to identify the potential candidates, with suitable skills and qualities. Not all these candidates will go on to the helm, but most will fill up important roles in your business as it grows.
While your children may want to continue the legacy, they may not always be the right candidate. Sometimes an employee or a relative may prove more meritorious and would make a better leader for your business. You can consult your family or a third party advisor in this case, to assess the capabilities of the potential candidates.
Mentor and monitor:
You need to train the future leaders for your business by assigning responsibilities and mentoring them. Mentoring is an essential part of the succession plan where you should involve identified employees in decision-making areas of the business and then establish a sound relationship with important stakeholders such as vendors and customers. Working closely with these candidates also ensures that you can tie in their own personal aspirations with business goals.
Identify these candidates’ strengths and weaknesses and work on it constructively to mold a refined and experienced leader for your business. Monitor the performance of the business under these candidates and see how they are faring in various activities. Make sure the trained candidates are good at prioritizing the roles and responsibilities.
They should act as catalysts that accelerate business performance and growth. Guide them where necessary and allow them to share ideas and thoughts on important matters. This way you are empowering the managers to move on to bigger roles.
The legal bits:
An important part of the succession plan is to settle the financial and legal matters in your business. You do not want to witness a bitter battle over finances or power when you plan to step down. A legally sound will and other necessary legal documents would ensure that any conflicts are resolved as quickly as possible.
The leadership transition would also be smoother. Involve legal and financial consultants to settle on aspects of business investments, tax issues, monetization plans, etc. and ensure that the next successor is aware of these decisions.
Your post retirement plan:
Ensure that you have a sound retirement plan; if you would like to serve your business for some more time or if you would like to completely retire. Ensure that your plan will help you sustain your livelihood and that you receive a monthly pension or some sort of financial support from the business that you built. Alternatively, you can also work as a dormant employee, who steps in from time to time to offer guidance.