There’s an old saying that explains the inherentbenefits of succession planning best: If you fail to plan, you plan to fail.
However, when your business is chugging along, andthe economy and your financial future looks secure, it can be hard to stop longenough to consider what might happen to your company if you suddenly weren’tthere.
The benefit of succession planning is to make sure a company always has the right leaders in place should a change happen quickly. By failing to create an orderly plan for succession, your company may not get a second chance if it doesn’t adapt immediately after a key player leaves the company.
After all, you can’t anticipate when a serious illness, accident, disaster or pandemic will strike – or even just a normal life event that takes someone in a new direction – but you can prepare for what will need to be addressed should a big change in leadership come.
While it may seem like a time-consuming process,there are six main ways succession planning benefits your business.
The benefits of succession planning are:
1. Disaster-proofs your business
You buy insurance to protect the company fromhurricanes, floods and fires. You install security systems to defend thecompany from theft. And you back up data to an off-site location tosafeguardyour business’s proprietary information.
Many business owners get so busy with the day-to-dayoperations of their company that they fail to make succession planning apriority. These leaders may think they’re too young to be hit with a seriousillness. Or they forget that a key player (or several) could be lured away byanother company that needs their skills and is willing to pay top dollar forthem. Any of these scenarios can leave a business uniquely vulnerable.
Remember: Succession planningis another step in your senior leadership’s strategy to protect the company – whether you are physically there for its long-term success or not. Starting the conversation may be daunting, but the sooner the work on your succession plan begins, the quicker your business is shored up for the long haul.
2. Identifies your most-qualified future leaders
Formal succession planning requires your company to:
- Identify those positions most critical to the future success of the company. These might not all be C-suite positions.
- Identifyinternal candidateswith the values, skills and desire to take on those critical jobs.
- Talk to potential candidates about their interests and career plans.
These crucial steps in succession planning lead to severalbenefits. First, a thorough look at yourorgcharthelps your leadership betterunderstand potential vulnerabilities, and can bring a sense of urgency tocross-train key employees in certain roles.
On the other hand, if there are truly no internalcandidates who seem right for leadership positions, then you know to begin anexternal search early on.
Most importantly, some of the benefits of succession planning is that it lets ambitious, less-experienced internal candidates know their hard work and skills have been noticed and appreciated enough to be considered for advancement. This can be an incredibleretention tooland motivator for leaders and subject matter experts who want to advance their careers further.
3. Creates structure for training and development
Once your company has identified that Sally, Bob and Bruce are interested in moving into senior positions, you can identify any competency gaps and begin preparing them for their eventual succession.
Some of the employee’sprofessionaldevelopmentmay come in the form of coaching,mentoring, job shadowing or a gradual increase in more advancedresponsibilities. Other positions may even require the candidate to go back toschool to get additional education or professional certification.
By tapping potential successors early, you giveemployees time to acquire the skills and experience they’ll need to performwell in their senior roles. You also let employees know that you’re willing toinvest in their growth as well as the company’s.
4. Keeps extra eyes on a job
Once your top prospects are being coached, your company has a chance to reap perhaps its best tool to grow and thrive. This happens when a two leaders are sitting and talking about why they’re doing things a particular way.
The simple process of explaining the status quo helpsreveal weakness in processes and procedures, uncovered sales opportunities andopportunities for positive change. This natural process allows your company tokeep an extra set of eyes on its senior roles and encourages questioning of thecorporate norms that may have become dated or inefficient.
In this way, succession planning results infuture-proofingyour company.
Conversely, whenretiringemployeesleave, they can act as a soundingboard for questions and concerns, troubleshoot customer problems and more. Thishelps to smooth the transition.
5. Maintains brand identity
You frequently hear news of CEOs who come into acompany from the outside with great promise, only to fail in a short time.Sadly, such disastrous hires often damage the company’s reputation andlong-term growth along with them.
This usually happens because the outsider CEO doesn’tunderstand thefundamentalvalues and missionof their new company because theyhaven’t “grown up” in it, so to speak. Wanting to put their own stamp on thebusiness, or failing to grasp customer needs, they move the organization awayfrom its core brand.
The benefits of succession planning is that it helps your company avoid this. By identifying and preparing an internal successor, your company ensures it will be led by someone who shares its values and deeply understand the company’s brand promise, its customers and its employees because they’ve lived it themselves.
6. Helps the company plan for the long-term
Change happens fast. When your company knows whereit’s going, your team can plan for the future.
If you position succession as part of your company’soverallgrowthplans, you create a path for retiring employeesto hand off their years of hard-earned knowledge and transition importantworking relationships before they leave.
The objective of a succession plan is to help your company grow with intent as you identify and build plans for vulnerabilities in other areas of the business. Other benefits to succession planning may include providing help in ascertaining which areas require innovation, setting realistic goals for growth and planning for future talent needs that may result from that growth.
Learn more about the benefits of succession planning by downloading our free e-book:The Insperity guide to succession planning through HR.
