Proactive Succession
PLANNING : THE BASICS
n 2021 , it is becoming even more difficult for business owners to have family members succeed them in the takeover of family businesses . Many times , children simply do not want to follow in the footsteps of their parents . With their children choosing a different path , the owner is then forced to find the right talent to take over the business . Unfortunately , finding the right person is much easier said than done in many cases .
Perhaps one of the largest issues with leadership transition is the assumption that the current leader knows how everyone else is going to react to being put into a leadership position . A parent may believe that their children will take over the company without ever actually talking about it . Those children may turn the position down when the time comes , leaving the future of the company up in the air . Likewise , people who thrive in lower positions in a company may not be suited to higher positions which require more flexibility and more adaptable skill sets .
What happens to these companies when they enter the transition period and find out that the plans they thought were in place are actually built on foundations of sand ? The correct answer is it is better not to have to find out . That is why succession planning well in advance is essential .
There are many reasons for beginning the succession planning process , even if one looks beyond the obvious :
• Identification of skill gaps and poassible training needs in the existing candidate pool can ease the transition .
• The retention of institutional knowledge is another critical element . Employees are now more often hired and retained for their thinking and knowledge instead of their physical labour . Keeping that knowledge in house is important .
• Employee retention and morale can both be improved by a visible investment in the employees of the company through the succession planning process .
• Business owners need to adapt to a scarcity of talent in the market .
• Business owners need to adapt to demographic changes in the job market .
The most obvious reason is that someone needs to be in line to take over the company when the current CEO is gone . With demographic shifts in the market , intense competition for talent is created . Candidates who are in the labour pool may lack experience or core skills that are required for crucial leadership positions . Combine that with an everincreasing number of baby boomers entering retirement and leaving their positions vacant and it becomes clear why succession planning is so essential .
THE MOST IMPORTANT FACTORS TO CONSIDER
Succession planning can get very complicated and can have a very wide scope , but there are a number of factors that play into nearly every succession planning program :
• Identification of the scope of the succession planning program . Typically , this is done by either fitting a position to a person or fitting a person to a position . The overall goal , in either case , is to keep talent in the company .
• Succession planning is not done in a vacuum . A thorough review of
20 SUCCESSION PLANNING STEELPLUS . COM