Succession planning’s mantra is to hope for the best and plan for the worst. You may already be thinking ahead about what will happen when a key team member is ready to retire, and that’s good. Retirement often plays out on a pre-planned timeline.
Sadly, as the last year showed us, your company could lose crucial leadership members under the worst and most unexpected circumstances. As we emerge from the trials of 2020, take time to think seriously about succession planning.
Start with updated job descriptions
How many founders out there have formal job descriptions? I’m guessing not many, so take this opportunity to create one. The same goes for any leaders added to your company without formal job descriptions.
Map out talent development
Next, review current company talent and identify future leaders. What attributes do your current employees have that could meet future needs? Do not simply slot in people because of their current tenure, loyalty, position, connectedness, and so forth. Additionally, do not assume star talent is well-rounded enough to go to the next leadership level.
Once candidates are identified, the work does not end there. You need to develop and train them. Make sure they get exposure and guidance needed for any leadership skill gaps.
Keep up with your network connections
In smaller companies, there may be limited internal candidates. Here’s where you plan for the future by being an active participant in your peer, local, and industry networks. When the time comes for new leadership, you can leverage a pipeline of outside talent recommended by your network.
Bottom line: A small business succession plan could take the form of new leadership or something else entirely. Perhaps selling the business or closing it down when the founder leaves is the right way to go. The point is, no business is too small to create a succession plan.
This is a decision with many complex financial implications. The more forethought you put into the plan, the better you will be when the time comes—whether that time comes when you predicted it would, or not.