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Succession Planning
2004-03-01
It is estimated that approximately two-thirds of all businesses in Canada are family controlled. Like any other business, the heads of these family owned enterprises must find successors as result of death, retirement and health reasons to mention a few.
Finding the right successor is one of the hardest things most businesses face, because many strategic and human relations issues have to be resolved.
First of all, lets start out with a common definition of Succession Planning: succession planning is the process of identifying, developing, and tracking key individuals for executive/management positions. This process applies to all organizations, large or small, public or private.
| | | | Integrate Succession Planning with Strategic Plan | | In most instances, the replacement of the head of the business and/or other managers can be planned for in an orderly fashion well in advance. However, to accomplish this it requires leadership and discipline on the part of those in charge to include the topic of finding a successor during strategic planning discussions. This naturally requires the identification of key positions within the organization, where finding a successor(s) is critically important to the continued success of the organization. In family owned businesses, for example, the head of the family needs to declare their intentions regarding when they plan to step down and whether the business can and/or should continue. | | | | Establish a Succession Plan Committee | | The aim here is to determine who should be involved in managing the succession and setting the criteria for choosing the best successor(s). The research reveals that no one approach is recommended. Some believe that an outside committee of advisors should handle succession, while others believe that it should be handled internally. Again in family owned situations, the head of the family sometimes believes that this responsibility is theirs and theirs alone. Naturally there are many options to choose from, however, one thing is clear that the person currently leading the organization must initiate the process because it will be much less effective if someone else tries to do so. | | | | Select Successor Criteria and Select Successor | At this point, whoever is in charge of the succession process should also establish the criteria that will be used in selecting the eventual successor. Naturally, the strategic, operational and management goals of the organization must be taken into account at this step. Selection criteria may include: the necessary experience, including management experience, academic credentials if necessary or important and special licences. In family owned businesses, the successor might be a the family member, who is best qualified, interested and has the support of the other family members. Once the process and the selection criteria are determined then it is just a matter of choosing the successor.
Develop the Successor
If properly planned and carried out, the successor is chosen well in advance of the departure (retirement/resignation) of the incumbent(s). This naturally provides an opportunity for the successor to shadow, possibly, the incumbent enabling him or her to gradually be exposed to and be involved with aspects of the business where they were previously not involved. At this stage, the incumbent could assume the role of mentor, ensuring that the identified successor is well prepared to take over. The transfer of key knowledge about the company, the finances, the customers, products, suppliers, service, etc. is critically important to ensuring not only the success of the successor, but possibly the success of the company as well.
Time the Takeover of the Successor
As with any major event timing is everything! This is equally true with timing the takeover of the successor. All announcements and introductions should be determined in advance and in order of priority. For example, in a family run business, the family members need to be advised. In other situations, the list could include: the board/shareholders, senior management, employees, customers - possibly -, suppliers, etc. It is critically important to assure wary customers that the business will continue to operate and deliver products and service as usual.
In today's fast-moving environment, succession planning is often more important - and more difficult to conduct - than ever before. By integrating succession with the strategic goals of the organization, following a process identifying who is responsible, selecting succession criteria, developing the successor and time his/her take over, the chances of orchestrating a successful Succession Plan are greatly improved! |
Contact:
 | Paul R. Hawn, President, Hawn & Associates Inc. | | Suite 507, 421 Bay Street, Sault Ste. Marie, ON P6A 1X3 | | info@Hawn.ca | | http://www.Hawn.ca |
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