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