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Succession Planning

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Business succession planning is a process involving the smooth continuation and success of a business which depends greatly on the availability of competent personnel. This could happen because sooner or later, everyone wants to retire. And retirement to a business owner isn’t just a matter of deciding not to go into the office any more

What are the key issues to be considered while developing a business succession plan? Who’s going to manage the business when you no longer work the business? How will ownership be transferred? Will your business even carry on or will you sell it?

Business Succession Planning Explained

To answer the above questions, it all comes to business succession planning. In today’s world, either by choice or other circumstances, one of the concerns for profit or non-profit organization is there may be no successor to drive it once the leader or key person leaves – and it is people, or more aptly, the right people, that make things happen.

What is likely to happen to the organization when a key leader is eliminated without succession planning in place? The highest chance would be a business that has become successful can just as easily fail. The future success of the business is left to chance once that leader with experience, drive and ability is gone.

As you can see by now, it is very important for a business to have a succession planning. This is different from business continuity plan as the business succession planning involves more about HR or people, to be exact. Typically, a business succession planning will involve activities such as:

  • Establishing the company’s strategic vision
  • Determine what roles and skills are critical for the growth of the company
  • Examining the field of potential heirs, buyers and other successors
  • Creating the ideal scenario for your departure from the company
  • Determining the value of your company, its receivables, and potential debts
  • Determining the succession’s tax implications and how to reduce them
  • Analyze and address the gaps revealed by the planning process
  • Deciding how roles will be shared among the heirs, identify and understand the developmental needs of employees to fill those positions
  • Ensure that all key employees understand their career paths and the roles they are being developed to fill
  • Train people for skills and positions that are not presently existing in the company
  • Understand the time needed to backfill key roles
  • Enrich succession plans through regular executive discussion of people and posts
  • Determining who will coach the successor and identify top performers in all departments
  • Make sure that top performers are engaged and satisfied to stay with the company for a long period
  • Continually review and check the process of succession and whether planned individual development has taken place

Let’s look at the key elements in a business succession planning.

 

 

 

 

 

 

  1. Top Down Approach
    It should be driven by the business owner or the CEO in any case of business succession, they have to fuel commitment and make it work.
  2. Strategic Plans
    The plan must focus on the culture and strategy of the business. The plan should include strategies to put the business interests ahead of any person’s interests and should emphasize merit over personal position.
  3. Future Goals
    The plan will have identified where the business is going and what it needs to get there. The succession plan should focus on who is needed to lead the business if it is going to accomplish the mission.
  4. Workforce Requirement
    You should aware that top leaders can be made or grown by the business, using a blend of many approaches:
    • experience and training outside of the family business and industry;
    • formal education and training courses;
    • internal job assignments, job rotation, special projects;
    • community and professional organization leadership.
  5. Knowledge Retention
    Managers must be evaluated on their ability to develop subordinates, not just on their own job skills. The existing management (family members and non-family members) should share in the responsibility for identifying and pursuing their development activities like those mentioned above.
  6. Critical Roles
    The employee performance evaluation process should include assessment by multiple raters. For example, a manager being rated not only by his superior but also by colleagues on his same or peer level and by subordinates.
  7. Commitment
    Talent management strategies will only be successful if the family and business is committed to making it a part of everyone’s job responsibility.

In summary, when doing your business succession planning, keep in mind that any transition must preserve the continuity of leadership and it is most important that the succession of ownership and management be perceived as a process rather than an event.

 

Source : http://www.corporatejourney2u.com/business/business-succession-planning.html

 

 
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