Planning for succession
You’ve built a prosperous business, and you’re looking to hand it over to the next capable set of hands. It might be that you’re looking to sell and move on to the next project; it might be that you’re planning to retire, and transfer control to a capable lieutenant.
Whatever motivates the change, it’s important that it go ahead while minimizing disruption, and ensuring that the business is kept intact.
What is succession planning?
Succession planning is the process via which you identify the person who’ll be leading the company in the future, and provide them with the skills and tools they’ll need to hit the ground running. It’s ideally something that you’ll do long before the time of departure actually arrives. It’s simply handing over a business to some capable one.
What to consider?
Several aspects of the succession are worth considering, like:
Who will succeed you?
The most important part of the succession plan, usually, is appointing a successor – or at least putting in place a process via which a successor will be chosen.
While your chosen candidate is unlikely to be the finished article straight away, you might recognize in them innate qualities and potential.
When informing your would-be replacement, be sure to emphasize that there are no guarantees, and that the situation might change.
But at the same time, get across that you have faith in their abilities.
What do they need?
To thrive, you’ll need to offer your replacement guidance and training. This might mean connecting your candidate with mentors who’ll be able to develop their soft leadership skills. If you’ve identified any areas of potential weakness, then address them as an urgent priority.
If you want until the point of no return to find out whether your candidate is suitable for a given role, then you might be in for a nasty surprise. A trial run, perhaps while you’re away on holiday, might provide a learning experience for the new candidate. After which, you can assess their performance and identify areas which might be improved.
Have a backup.
Employees aren’t like other kinds of assets. They can occasionally fall ill, or have changes of heart, or decide to pursue other careers.
If you go out of your way to develop a single candidate, then you might neglect others – which, if your first choice doesn’t pan out the way you’d liked, might be disastrous.
Financing the succession.
Putting in the preparation can often be an expensive process, especially if your attention is diverted away from other parts of the business. During the transition, the last thing the new incumbent will want to think about is problems with cash-flow.
It’s therefore important that a cushion of cash is built up. Fortunately, there are plenty of online sources of finance for businesses in this position.