7 Tips for Effective Succession Planning

Research estimates that more than 66 percent of companies lack any type of formal succession plan for their organizations. But in today’s fast-paced, constantly-evolving markets, establishing a succession plan is critical for success in the present and in the future. Massaging talent to eventually fill leadership roles means positioning a company to retain their talent for the long haul.

Organizations that fail to look into the future when it comes to staffing leadership positions often find themselves with a workforce that is disengaged and confused about their value within the company. Succession planning ranges from 1 to 3 years and lays the foundation for the seamless movement of internal talent. It is important to distinguish the fact that succession planning at its core is preparing, not pre-selecting. This distinction is critical to reaping the full benefits that come with thinking ahead in this manner.

Preparing the next generation of personnel means thinking through everything from job skills to social relationships and from knowledge to organizational practices. And contrary to popular belief, succession planning makes sense of companies of all sizes, not just massive organizations. The value that comes from succession planning proves to benefit businesses in a wide variety of ways, opening the door to vital discussions and fundamental actions across the company.

Today, we highlight some of the most significant aspects linked to succession planning and the benefits that they bring any company.

Succession Planning for Strategic Company Growth

Pushback against succession planning is extremely common amongst leadership across nearly every industry. The truth is that company executives often feel like this exercise is a waste of time, pointing to the massive number of other activities that could “better serve” the organization immediately. While it may feel like a waste of time, succession planning is any but a time waste. In fact, when done properly, succession planning has been known to shape the future of a company for better efficiency and overall success.

The following are some of the most useful tips for effective succession planning:

1. Go into each step with an open mind. The person that you may think is perfect for a position may not pan out the way you had imagined. Be open to assessing skills critically, while trying to overlook current titles.
2. Be prepared to adapt to demographic shifts. Have you thought through how you want leadership to look in terms of ethnicity, gender, sexuality, or age? This is important to map out now.
3. Don’t be surprised if you need to go outside of the company. While succession planning is often associated with internal talent, it is actually a crucial time for looking beyond the company to fill roles strategically.
4. Ignore current hierarchy. While this is easier said than done, it is important to consider lateral and linear movement within the company. Top level leadership often falls victim to hierarchy blurring their vision of talent and skills.
5. Make it a habit. Succession planning is not a one-time exercise. It must conducted at least annually to ensure that the plan is current and accounts for shifts and trends both within and outside of the organization.
6. Communicate the vision with the entire company. Engaged, informed employees make the best employees. Succession planning is not only a motivating tool, but a clear action plan for workforce development.
7. Consider trial runs to test out your staff in their potential new positions. In doing so, you will get a taste for how the company will run in the future and will have the benefit of making changes before anything is set in stone.

Thinking long-term is difficult for even the most seasoned CEOs. Succession planning is not an easy task, but it is always worthwhile for the benefit of the company today, tomorrow, and well into the future.

At Ellrich, Neal, Smith & Stohlman, P.A., we understand that new, growing and mature businesses face financial and operating challenges daily. Our expertise in this area includes business plan development and operational reviews. We also provide services in market assessment and analysis, financial projections and forecasts, cash management, succession planning, budget analysis and trend analysis such as sales, expenses and cash flow. Contact our Palm Beach Gardens or Miami offices today to speak with an expert!