When you think of growing your business, it’s probably somewhere along the lines of increasing sales, opening up more branches, or aiming for a bigger goal. While all of these are correct, the best managers also know that their employees are the heart of their company. Your team is arguably the most vital asset to your business.
Whether it’s a change of career or a better opportunity that comes knock at the door, it’s inevitable for some of your best talents to move forward and pursue other ventures. When this happens, your business should be ready to fill in key roles to ensure smooth transitions and continue long-term growth. This is called succession planning.
Many leaders believe that succession planning is critical to their business—in fact, 86% think it’s “urgent” and “high priority.” However, only 14% believe that they’re doing an excellent job at it.
The potential gains from a solid succession plan are numerous and go beyond having employees groomed to take on new roles, like developing stronger organizational culture and enhanced career development opportunities for your team. Below are some dos and don’ts in creating an effective succession plan that will benefit your business.
Succession plans need structure. If you don’t have a clear plan in place, you risk choosing employees who are unfit for the job. For example, take a look at Guthrie-Jensen’s Seven-Pointed Star for Succession Planning and Management:
We tackle these concepts in-depth in our Succession Planning public seminar, which you might want to check out. The bottom line: outline your programs.
Studying your org chart can help you identify which positions need to be safeguarded. This includes the level of power or control, responsibilities, and salary. You should also look at the age and tenure of the people currently occupying these positions. Is anyone nearing retirement? Have any of them opened up to exploring opportunities elsewhere? If you’re able to sense impending change, then it’s all the more reason to prepare.
The most important step is assessing your team. Who are the best possible candidates for the most critical roles? Not everyone you shortlist will come from senior or top positions already—some may even have support roles. The key here is to make sure you don’t skip out on any person as you evaluate.
Do you have tools for training the next person taking over your company’s critical roles? Are they interested in stepping up to take them? What’s your timeline for creating and implementing your succession plan? These are just some of the questions you need to answer while devising a strategy in future-proofing your business.
While it’s true that plenty of executive or managerial roles tend to be client-facing and social, it’s not enough to rely on an employee’s extraversion for them to do their jobs well. People skills are just one facet of the job—and plenty of introverted employees have this, as well! Aim to be holistic in your picks, and thoroughly assess the skill set of your team.
In some cases, you may already have someone in mind to fill a particular role. They could be one of the top employees that you think has a huge potential. Before training them for their future position, ask them first if they comfortable taking it on. If they’re not too keen on this proposal, try to avoid forcing them into it. This can easily backfire. If an employee isn’t looking for an opportunity and you pressure them into taking it, it could affect their performance and satisfaction in their jobs.
Just like you should not fill a managerial role based solely on performance, so should you not do it based solely on seniority. Many companies are tempted to do this because it avoids the confrontation of having to tell senior employees why they haven’t been picked as the next in line. But adhering to such practice may create a culture of mediocrity and demotivate employees from doing their best in their jobs.
The issue of promoting based on seniority vs. ability has actually been around for decades, and there’s still no definitive answer as to which approach is better. The best course of action is to consider both aspects carefully during succession planning to ensure your policy is not only beneficial to your bottom line, but also fair to your employees.
It’s a good idea to train a handful of shortlisted employees for any given role so that you can ensure that you’ve found the right fit. Your first choice might decline the opportunity, change career direction, or just might not be the perfect fit despite what you initially thought. Having viable backups is a smart decision.
What you want to happen is for your employees to continually have the training and learning opportunities, while at the same time ensuring that your business has a long-term security plan. Succession planning may be tricky, but with these dos and don’ts, it’ll definitely be more manageable.
Filed Under Business Development, Leadership & Management
