24 Aug An Effective Succession Plan Calls for Decisive Action
The prospect of leaving your company in the hands of someone else likely brings mixed emotions. You have, no doubt, spent a substantial amount of time and a great degree of effort to achieve the level of success you have had with your enterprise as it is today. So, as the saying goes, parting will be such sweet sorrow.
Yet, when it comes to creating and executing a succession plan, decisive action is critical. You have to respect the importance of timeliness — not only for you and your family, but also for your successor and employees. So, here are two key questions to answer:
1. When is your target date?
By designating your departure date far enough in advance, you are more likely to pick the right successor, as well as facilitate a smoother transfer of power.
In some industries, it can take years to appoint and train a qualified successor and effectively work through the many management, ownership, and organizational issues. But do not choose a date too far away, because your successor-to-be may get tired of waiting.
2. How will you break the news?
Maybe it is many years away or maybe it is sooner than that. Do not wait too long to reveal to staff when you are leaving the company and whom you have selected as a replacement. Giving everyone ample notice (as long as one to two years) will allow plenty of time for employees to voice their concerns about your successor and the transition as a whole.
Break the news gently to gain their support for the new boss, while giving employees good reasons to stay with your company. If disagreements arise, discuss the issues openly. Seek compromise by enabling your successor to exercise his or her newfound decision-making authority but staying involved as a consultant to ensure he or she does not alienate staff.
Need some help?
Coming up with (and carrying out) a succession plan can be among the most difficult things a business owner ever does. Please contact us for help assessing the financial and operational viability of your plan.