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Succession Planning to Ensure Continuity

Updated: Mar 5, 2023


Every company, regardless of its size, need to have a succession plan within their organization—it doesn’t matter if you have 50 employees, 100 employees, 500 employees, or 1,000 employees. Succession planning identifies a couple of different things within your business. 1. Who are those really focused on understanding the leadership landscape within your organization, and 2. Who are your top leaders and who are the people that could possibly assume their roles (or yours) should something happen to any of you.


When you're talking about top leaders in your organization, it doesn't matter if they're 45 or 58 years old—in great health or not—crazy, unexpected things happen. They could decide to retire or take another job, get hurt in a car accident, experience a medical emergency. What happens if they can no longer fill their integral position?


You've got to have a plan for these situations—who would you trust to take the reins of the company? The key thing is continuity in every aspect of your business—including your leadership team—and readiness is a big part of continuity. Not only asking "who," but also "when." When can these trusted people assume a certain leader's role? 6 months? 2 years? Possibly the best example of succession planning in action are NFL teams. If the quarterback goes down, you need to know who will replace them, right? The Dallas Cowboys experienced a situation like this last year when Dak Prescott had a season ending injury. The coaches didn't need time to discuss who was going to replace him, did they? Nope, because they have a second string quarterback, a third string quarterback, a fourth string quarterback who have already been assigned. You've got to be thinking about succession planning for your company—just the same as any football, baseball, or basketball team would. You've got to have your number two and your number three preselected and available at a moment's notice. Making sure the business will continue to run without its #1 person (owner, GM, CEO) is paramount. You never know what might happen!


Another key reason why this process is so important relates to valuation. Should you decide to sell, having a succession plan increases the value of your business. If your business can’t exist without you, a prospective buyer would be taking on a lot of additional work in the form of restructuring, hiring, etc. Having leadership talent and a strong leadership pipeline are just as critical for a $10 million company as they are for a $10 billion company. If the company doesn’t have plan of succession, that’s a huge deficiency within the organization. It's important to identify who those people are, and to be training and grooming them for the possibility of needing to take over the organization.


The final critical aspect of a succession plan is to identify the next generation of leaders in the business. Who are those employees, possibly between 30 and 50, who need to be developed and mentored to take on critical roles in the next 5-10 years? The top reason key talents leave organizations is that they don’t see future growth or they don’t feel challenged—it’s not about pay. A good succession plan looks at the next level of leaders—who are they and what does a business need to do in order to grow them and retain them? Going back to our sports example; it’s about recruiting, or "drafting," key talent to ensure the continuous improvement of the team. No business owner wants their team to fail, right?


I hope the blog above gives you a good idea as to why succession planning is so critical for every business regardless of size. You can find me at HR Catalyst Consulting, or email me at mmitford@hrcatalystconsulting.com to start a dialogue and continue the conversation!

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