Succession plans do not usually feature highly on the priority list for small businesses. Yet failing to plan in this area can have a seismic impact on a business – particularly where the business owner’s departure is through unexpected illness, or worse.
The benefits of planning in this area are numerous. For staff, it provides a clearer vision for the future. For investors, it provides reassurance that there is contingency in place for when the business owner steps down. For the business owner him or herself, passing the reins to other trusted members of the team – albeit slowly – can help to address a work-life balance with which so many struggle.
Business owners can often find it difficult to let go; after all, their business is literally part of their DNA. However, any growing business cannot rely solely on the leadership of one or two individuals, and implementing a staged plan need not be daunting:
- Identify those key areas and positions that, where vacant, would have the most detrimental impact on the business’ ability to achieve its objective
- Compile a list of required capabilities of successors. Whilst it’s tempting to consider this solely according to department or function, the softer skills that help the business to function efficiently should not be overlooked. An individual’s ability to get things done by building upon their informal networks across departments, hierarchies or with external stakeholders is as important as any product, company and sector knowledge.
- Identify interested employees and assess their knowledge, skills, ability and experience. It is natural in small businesses to look first and foremost to long-serving members of staff, particularly when they are family members. But if the skills for both today and tomorrow are not present (and nor can they be coached), the contribution of incoming successors will pay for their onboarding costs many times over.
- Develop knowledge transfer plans so that the business owner’s years of experience can be harvested, allowing others to build on his or her legacy.
- Evaluate effectiveness. Succession is not a linear process; it is a collective process that requires buy-in across the business.
Succession plans need to be implemented slowly and methodically to ensure all are committed to making them work. The business owner needs to have confidence in his or her successors and empower them to succeed; and the team as a whole need to accept the new boss. Done well, succession planning is an opportunity to sow the values of the founder for many years to come.
To find out more about Cimteq’s own approach to succession planning, please email Katy Harrison, Marketing Manager, Cimteq, [email protected].