Succession Planning for Small Business
Small businesses have smaller staff with fewer key players. If one important member dies and an adequate replacement is not readily available, the business may suffer significantly. To avoid this, small businesses should have a succession plan in place. Succession planning is a process for identifying and developing new employees to replace key roles in the event that the key role leader retires, leaves, or dies. This can remove a significant threat for small businesses. The Balance helps us to fill in the gaps on succession planning, with all the basics of this topic listed below.
Who Needs Succession Planning?
All organizations, no matter their size, need succession planning. While it is less likely that you will have potential successors for every role in a ten person company, you can minimally cross-train.
The cross-training ensures that employees are prepared to babysit the key job when the employee resigns. This keeps responsibilities from falling through the cracks.
This will keep the mission on track if a key employee leaves. It’s not as effective as having a fully trained employee, but that is not always possible for every role.
How Do Companies Currently Do Succession Planning?
Many companies have not introduced the concept of succession planning in their organizations.
Others plan informally and verbally for succession for key roles. By this type of process, for example, Eric is identified as the strongest player on Mary’s team. This makes him likely to succeed Mary when she is promoted or leaves.
In other conversations, senior leadership teams put forth the names of employees they believe are strong players with great potential in their organizations. This helps other senior leaders know who is available for potential promotion or reassignment when they are looking for an employee to fill a key role.
The advantage of a more formalized system is that the organization exhibits more of a commitment to mentor and develop the employee so that he or she is ready to take over.
Organizationally, it allows all managers to know who the key employees are in all areas of the organization. This allows them to consider strong players when any key role opens up.
Advantages for Employers and Employees
Effective succession planning brings advantages for both employers and employees and it’s worth your time.
Advantages for employees include these:
- Employees who know that a next role awaits them receive a boost to self-esteem and self-respect. This enhances their efficacy and value as an employee.
- Knowing the organization’s plans for your next potential opportunity—and that there is one—reinforces your desire for career development and career opportunities. This development is one of the areas that employees want most from their employer.
- You are able to identify the skills, experience, and development opportunities necessary to help the employee become prepared for progression when the next job opportunity turns up.
- The ability to work with their manager or supervisor to make sure that the employee has a career plan that moves him or her in the direction of their next opportunity.
- The employee’s value is shared with the rest of the organization so that if an opportunity comes up, the managers can consider the employee to fill the role. In an informal system, managers organization-wide may not know the value of the employee and his or her skills. (Even if the current manager has shared this information, in the world of busy, it’s tough to remember.)
Advantages for employers include these:
- You rely on staff to carry out the mission and the vision and to accomplish the goals of the organization. The loss of a key employee can undermine your ability to accomplish these important objectives.
- You need prepared employees to step into roles as your company grows and expands its offerings and services. Or, your lack of developed employees will stymie your growth plans.
- The need to have replacement employees ready if you decide to promote employees or redesign your organization enables you to make necessary changes without being hampered by a lack of replacements.
- Knowledge about key employees is shared with managers organization-wide. This information allows managers to consider the widest number of candidates for any open job.
- The Baby Boomer generation is in the process of retiring. They are taking with them 30-40+ years of knowledge, experience, working relationships, and information. You want to capture that knowledge before it walks out your door.
Effective, proactive succession planning leaves your organization well prepared for all contingencies. Successful succession planning builds bench strength.
Develop Employees for Succession Planning
To develop the employees you need for your succession plan, you can use such practices as lateral moves, assignment to special projects, team leadership roles, and both internal and external training and development opportunities.
Through your succession planning process, you also retain superior employees because they appreciate the time, attention, and development that you are investing in them. Employees become motivated and engaged when they can see a career path for their continued growth and development.
To effectively do succession planning in your organization, you must identify the organization’s long-term goals. You must hire superior staff.
Identify and understand the developmental needs of your employees. You must ensure that all key employees understand their career paths and the roles they are being developed to fill. Also, focus resources on key employee retention. You need to be aware of employment trends in your area to know the roles you will have a difficult time filling externally.
Prepare Your Succession Plan
The future is uncertain, but the future of your business can be less uncertain with a solid succession plan in place. Create a more stable and secure business with a succession plan.