Making a success of succession
How to plan for when it’s time to hand over the reins of your business
In my 20-plus years in the construction industry, I’ve seen many successful businesses come unstuck through their failure to properly plan for the succession of key personnel.
Even those who have developed their succession plans are often thrown into disarray when the unexpected happens, such as a rising star deciding their future lies elsewhere or a key player stepping aside because of ill health.
I’m not suggesting that it’s possible to plan for every eventuality, but the laissez-faire approach to succession planning that many businesses take is really asking for trouble.
A proper succession plan, effectively communicated to all the key players, will go a significant way to helping any business cope with unexpected staff shocks.
What is succession planning?
Succession planning is the process of identifying and developing employees within an organisation and/or identifying external candidates who have the potential to take on leadership roles in the future.
Effective succession planning is essential for the long-term success and viability of any business, as it ensures that there’s a pipeline of capable and well-prepared individuals ready to step into key positions of authority when the need arises. The benefits of such planning are many, and include:
Smooth transition of leadership – when a key employee leaves the organisation or retires and there is a well-defined succession plan in place, the transition of leadership is less disruptive to the organisation and there is less chance of a power vacuum being created. This allows the business to continue operating seamlessly, without any loss of productivity or impact on staff morale.
Retention of top talent – when employees see that there is a clear path for career advancement within the organisation, they’re more likely to stay with the company long-term. This helps businesses reduce turnover and the costs associated with recruiting and training new employees. In my experience, not seeing a clear pathway is one of the main reasons talent leaves a business.
Improved employee engagement and morale – employees who are part of a succession plan are likely to feel more engaged and motivated. Knowing that their employer is invested in their development and has a plan for their future can boost employee morale and loyalty, leading to increased productivity, improved quality of work and higher levels of customer satisfaction.
Reduced recruitment costs – a well-defined succession plan reduces the need for external recruitment, saving on costs such as advertising, agency fees and interview expenses. Internal promotions also tend to result in faster onboarding and training times, as the employee is already familiar with the company culture and processes.
Continuity of company culture and values – by developing employees from within the organisation, new leaders are likely to already share the same values and beliefs as their predecessors. This helps to maintain the company’s culture and values, which is an important factor in attracting and retaining customers and suppliers.
Better decision-making – as employees are developed and trained for leadership roles, they’re given the opportunity to gain experience and exposure to different aspects of the business, helping them develop a broader perspective and deeper understanding of the organisation. This results in better decision-making as the leaders have a more holistic understanding of the business and can make better informed decisions.
Improved business performance – by developing and promoting employees from within, businesses can ensure that they have a strong leadership team with the right values, skillset and experience necessary to drive growth and success and increase revenues, profitability and market share.
Successful succession planning is an essential process for the long-term success of any business.
Investing in such planning now can help your business build a strong pipeline of capable and well-prepared leaders who are ready to take on key positions when you need them to step up.
Failure to properly plan in advance for this succession can lead to dips in business performance, staff exodus and, in some cases, business failure.
As a business leader, you need to be planning your own succession plan and that of your key players NOW. Failure to do so puts your operation at needless risk.
About the Author
Managing Director, McDevitt & Co