Business Matters: Succession planning – that’s for the big boys isn’t it?

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In my role as an independent business advisor, I often get called in to businesses when thereis a problem and quite often this can be because someone important has left the business and they are in a mess.

Today I want to talk about planning for key people leaving the business or Succession Planning.

Unfortunately we are not just preparing for someone giving a months’ notice to leave the business but the unfortunate situation where someone has a bad or even fatal car accident on their way home from the office or suffers a heart attack and consequently doesn’t come back again for a long time, if at all.

As responsible business leaders we have to look at all of the possibilities and have a plan in place that we can put in to immediate action that results in the continuation of the business whatever human resource disaster occurs.

Often, the smaller your company is, the more critical succession planning becomes.

And the need for a what if plan in a small or medium sized business is often not just a case of looking at the loss of key managers but also for the loss of the guy that has been with you for 30 years and is the only person that knows how to operate that machine.

Or your IT expert that is the only person that understands your data systems, anti-virus systems or communications network.

If this has got you thinking, then rest assured, there are a few simple steps you can take to get moving:

1. Identify business critical roles and ensure each role has a clear role profile detailing the competencies, skills and behaviours that are needed in that role.

2. Have a robust performance appraisal process in place that will allow you to identify internal talent and their development needs.

3. Build a succession matrix including a rating of ‘flight risk’ for those critical roles. How likely it is that someone will need to be replaced and when might it happen?

4. Go back to your business plan; identify talent for your future business requirements, not just for what it is today. Which potential successor candidates are capable of making these changes and taking on new skills?

5. Identify where your succession plan may necessitate bringing in external talent or training an existing employee to take on new responsibilities and skills.

6. Invest; this doesn’t necessarily mean money (although it’s unlikely to be completely free) but it will mean time.

Finally, remember this is a continuous process and has to be taken seriously, it can literally mean life or death for some businesses in some cases.

Succession planning is one of those things that is easy to put on the back burner, but if disaster strikes you will wish that you had taken it very seriously while you had the opportunity.

Don’t miss Paul’s advice column every week in the Halifax Courier.