Succession Planning is More than Insurance
When I ask CEO/Owners if they have a Succession Plan, they begin to tell me about their Key Owner Insurance Policy. In other words, what will happen to their company when they pass away? Most of them have given it a great deal of thought and have made sure that they have ample insurance to cover their estate taxes and provide for their family, but not much thought about the continuance of the business. When I ask the question again about succession planning while they are still actively running their company, I often get a blank stare, or “but I am still here”.
A Succession Plan looks at the people that make up the company today and how they are performing. It also takes a future look at the company to determine the talent that will be needed to run the company 5 and 10 years from now. A good succession plan even takes into account the death or retirement of the owner and the planned continuance of the operation. Succession Planning is a process for keeping experienced employees in the organization, so the business will continue to grow and prosper, with or without the current CEO. It is generally a 12 to 36 month process of preparation and should be an ongoing process after that. Succession planning can be a valuable tool to smaller organizations that have limited resources, and must rely on cross training the existing talent to perform well in many different positions.
I once had a boss who told me that Succession Planning was like a Basketball Team made up of dribblers and shooters. If you don’t cross train the team to do each others jobs, then you have half the team who dribbles up and down the court and never takes a shot. The other half just keep taking shots from all over the court, sometime they make a basket, but most often they don’t. But if the team is trained to do each others job, the team effect kicks in. They dribble, they pass, they shoot, and they score. And scoring means increased revenue to the team!
While all positions are unique to any organization, as a part of succession planning, we should be looking at ways to cross train all these employees to ensure a seamless movement of talent within the organization so we are prepared for the unexpected.
A reduction in the learning curve for almost all positions can be achieved if much of the knowledge that is gained by experience could be passed from one generation of workers to another. With succession planning, job sharing can occur concurrently between the worker and the potential successor, giving the successor the unique opportunity to gain useful skills and knowledge without a long, on-the-job learning curve. In addition, succession planning will substantially decrease the need for formal training programs, and the resources they consume to recreate the learning opportunities. Succession Planning will also increase employee engagement and thereby improve employee morale which will increase employee retention. Engagement and retention are cornerstones to an organizations success.
Succession Planning over the longer term will provide the CEO/Owner the opportunity to view employees in functions that they were not hired for, thereby demonstrating their future value to your company. You will be able to identify the best and the brightest within your organization and move them to positions that can help you increase productivity, thereby increasing revenue. Succession Planning will not only help you cross train the Shooters and the Dribblers, it will identify the next generation of Coachers for your organization.