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9 Steps to Develop a Business Succession Plan

 

Does your company have a business succession plan in place?

As a business owner, having a plan in place that identifies and trains next-generation leaders helps ensure that your company will remain a viable entity well into the future. Succession plans are needed because they provide a road map for the company to follow in the event a key employee unexpectedly leaves, retires, becomes disabled or dies. These plans need to be strategic, thorough and carefully implemented.

How can you make the process easier?

Follow these 9 steps to make the process easier:

  1. Understand that succession planning is a long-term process. The process of identifying and training your firm's next leaders can take from 1–3 years, sometimes longer.
  2. Put a team in place to formulate and initiate the plan. Succession planning takes a lot of objectivity and introspection. Depending on the size of your company, chances are it will take a team to develop and oversee implementation of the plan. At least initially, the team should include no more than three people. You'll want input from key people, but you also want to maintain control of the process.
  3. Identify the skills and talents that are essential to your business. List the things that make your company great and differentiate it from the competition. Then categorize these reasons into categories such as those that are knowledge-based, specific to your industry or skills-based.
  4. Identify which of these skills are learned and which are based on influence. Think about this example: some people know how to repair a tractor, others are good at troubleshooting what's wrong with the tractor, still others can decide at what point it's no longer cost-effective to repair that tractor and some can negotiate the best price for a new tractor. It's easier to teach someone how to repair a tractor than it is to teach them how to become a good negotiator.
  5. List the skills and talents your team is lacking. Can someone at the company be trained in these areas or do you have to look outside the company? If you do recruit from outside the firm, you need a plan for how you'll conduct your search. You'll also need to decide how transparent you're going to be.
  6. Compile leadership traits. Certain traits are universally sought after, including comfort level with change and uncertainty as well as interest in learning and adaptability.
  7. Keep in mind that the next leader won't — can't — be you. The reasons you're a leader are intangible. They're a combination of knowledge, vision, and people skills. The next leader may be skilled and knowledgeable and have strategic vision, but it's a guarantee that their people skills won't be the same as yours.
  8. Take a step back. If more than one person can be that next leader, nurture them all until it becomes clear which person will be the one to take your place.
  9. Focus on training and development. Have plans in place for training and developing talent. The goal is to prepare people to serve at their highest potential. This can mean anything from mentoring and coaching to technical training. Good talent is hard to find, and business owners need to have clear strategies that reinforce their value to the company.

Contact us when you’re ready to put in a place a sound succession plan for your business.

 
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Coulter & Justus, P.C.
Coulter & Justus, PC
(865) 637-4161
9717 Cogdill Rd, Suite 201
Knoxville, TN 37932
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