Succession planning is one of the inevitable activities any forward thinking manager and business owner cannot afford to oversight. It is very crucial to the growth and expansion of any business. In fact, succession planning strategies must be identified well in advance and implemented as it influences various aspects of the business including your marketing strategy and business valuation.
Essentially, it is a process that involves identifying (and developing) various internal personnel who depict the desirable characteristics and potential to take over key leadership positions of a business or company. This process is designed to develop and increase the number of capable and experienced personnel ready to assume the various leadership roles as they become available.
Importance of succession planning
The benefits of succession planning are quite obvious and straightforward. At the core of this process is replacement planning which focuses narrowly on availing back-up employees that can take up specific senior roles in case such need arises. However, succession planning is a grand process that involves talent pool management; developing different feeder groups across the entire leadership progression.
• Preparation – When senior managers and those in upper positions retire, resign or leave for any given reason (such as sickness and death), your business should be already prepared with capable employees that can take up these roles and handle them just as efficient. Without this forward-thinking plan, you are set for sudden disruptions and hurried recruitment which may result in less capable employees in senior management roles. This is disastrous to the growth and expansion of any company.
• Promotion and growth – Any company or business has key roles that should be filled with skilled capable employees. Succession planning basically enables businesses to identify and develop employee skills to a point where they can fill each key role. The process entails recruiting superior personnel, training and developing to fill given roles and offering them promotion opportunities and advancements into more challenging roles. When your business expands, increases sales or looses employees, succession planning guarantees you qualified experienced employees to fill the new roles.
• Business continuity – According to statistics, many business owners plan to quit their roles within the next 5-10 years. However, only about 10% have a well written formal business succession plan. 35% have an informal plan while over 50% have no plan at all. Following the increasing proliferation of small and medium sized enterprises, succession and business continuity issues have become quite common. In the even a business owner dies, it is often deemed necessary to shut down the business even if it is healthy for various reasons that include lack of proper liquidity.
Succession planning does not only ensure you have capable employees to handle advanced roles in the company. It also helps to prevent or at least reduce the many issues associated with ownership transfer and business succession.
It is important to have a formal succession planning as it affects the future of your business as well as the marketing strategy. This process helps you meet the career advancement expectations of employees and also improve their commitment and retention. What’s more, it is a way for the leadership to engage others in lower ranks and meet various objectives. Nonetheless, you must ensure you develop comprehensive succession planning strategies that will work towards meeting your unique business requirements