SUCCESSION PLANNING
10
Strategies For Optimal Succession Planning
Succession planning is the way in which new leaders( in this case, of businesses) are identified and developed in order to replace former leaders who have left their positions. A proper succession plan will leave your company with good leadership who will help maximize value and develop strategy moving forward. Unfortunately, succession planning is often ignored until it is too late. Don’ t let your company fall into the trap of not having a plan in place when one becomes necessary.
Here are ten strategies for optimal succession planning:
1. BUILD A PROPER PIPELINE OF TALENT With a solid talent pipeline in place, transitions are not only fast but also efficient in terms of learning curves. It’ s always faster to replace from within using talent who already know the ins and outs of the company and are aligned with its culture.
2. PREPARE FOR THE UNEXPECTED The loss of a CEO, for any reason, is often a large blow to a company. Plans need to be in place including a secondary, emergency succession plan that can be used in the interim period between CEOs.
3. SET REASONABLE TIME FRAMES Preparation of internal candidates for assuming the role of CEO should begin five or more years prior to the anticipated transition point.
4. PROMOTE INVOLVEMENT AND ESTABLISH BOARD OWNERSHIP A board of directors is expected to be involved in the succession process as a whole.
5. ALIGN PROFILES AND STRATEGIES The board needs to agree on the strategic direction of the company and the profile of the individual it wishes to execute that strategy.
6. MANAGE THE TRANSITION Help the new CEO assume his or her role through proper onboarding.
7. BE WISE IF LOOKING FOR EXTERNAL TALENT Looking externally for new leadership comes with a number of problems. External talent costs more, is less invested in the company, and will have a longer period of onboarding.
8. SELECT THE PROPER CEO Because of the stakes involved, picking the right CEO should be a grounded decision based on an in-depth analysis and assessment of each candidate. Make sure candidates are not only qualified but also aligned with your company ideals and fit its culture.
9. MEASURE PERFORMANCE METRICS Nothing can improve unless quantitative measurements are being made. Keep track of key metrics in your company and, once a CEO has transitioned into his or her role, make sure to continue evaluations of those metrics over time. Always be aiming for improvement.
10. REGULARLY REVIEW YOUR PLAN Even the best designed plan isn’ t going to be able to take into account everything that may happen in the future. Relationship dynamics change, qualifications change, and the direction of the company itself can change. Be aware of these potential changes and review your succession plan regularly to address them.
For more information or to begin strategizing succession planning for your company, contact Lloyd Compton of MRSB( www. mrsbgroup. com) at lloyd. compton @ mrsbgroup. com or 902-368- 2643 ext 256 to schedule a consultation today. +
BY: LLOYD COMPTON, MRSB
Lloyd frequently delivers workshops on business valuation, financing a business and understanding financial statements. Lloyd is also a member of Collaborative Practice PEI, an effective, voluntary process utilizing the help of legal, family and financial professionals to resolve family disputes without court. Lloyd lives in Charlottetown with his wife Brenda and their three children.
28 | SPRING 2017