The first thing most people Think when they hear “succession plan” is retirement, which is typically the catalyst that puts the succession planning in motion. While some business owners think it only applies to transferring ownership to the next generation, succession planning should be in place for everyone on your company’s organizational chart. Advanced preparation also can eliminate some headaches.
Succession is defined as the coming of one person or thing after another in order or sequence, or in the course of events. This certainly makes sense when we look at an owner’s retirement. Who is next in line? However, as one employee is promoted to fill the vacancy, it creates a void for their role and so on down the chain of command.
Typically, you have forewarning of when someone is retiring and can create a timeline to get their replacement up-to-speed to fill the role. But what happens when an employee gives their two weeks’ notice to leave or, worse yet, becomes ill and can’t work? In those cases, the timeline to fill their role is extremely short, with very little to no time to prepare for the transition.
Creating a succession plan for roles beyond just the top of your organizational chart can be a lifesaver. For a smaller business, preparing for unplanned employee vacancies can be the difference between success and failure.
The succession plan is much more than moving everyone up the corporate ladder and filling the bottom spot; otherwise, we could have our succession plan in place in 15 minutes. In reality, it is much more involved than creating a depth chart for each position in your company.
The 3 P’s: People
When helping companies develop a succession plan, I look at the “three P’s”: people, processes and plans. People is the easiest of the three, but it still takes due diligence and preparation. Back to my previous point, this is more than merely identifying the best employee for the job. Do they have the knowledge, skills and ability to fulfill the role’s duties, or at a minimum, the capacity to develop the traits they need for success? In addition, do they want the role? Many managers and owners forget to ask employees about this key factor. Some employees are content with their current position and do not want the additional responsibility and stress of the new role, even if there is more pay and a new title. It is essential not to lose sight of the fact that some employees only want to show up, do their job and go home at the end of the day.
Processes are the insurance that your business’ operations are done consistently. A documented process creates consistency between staff and is the basis for developing employees to fill new roles or voids in existing positions. If each project manager or estimator does their job their way, how will someone new be able to pick up where they left off?
Another component of documented processes is that they are a great method for sharing knowledge between employees. Documented processes create the road map and common language employees use in their daily duties. Employees with experience can share their knowledge with less-experienced ones within a frame of reference that is meaningful to both. This knowledge-sharing becomes the foundation for developing employees to move up in the company and maintain consistency in day-to-day operations.
The plan ties all of this together, gets everyone on the same page and creates some certainty in the business’ future success. The succession plan is a way to communicate with employees that there is a procedure in place should someone leave. For company leaders, this creates a proactive approach to move the business forward instead of being reactionary should someone leave the company unexpectedly. As with most business strategy documents, your succession plan should not be carved in stone. Regularly revisit it as you create new roles and employees join the company or leave, whether anticipated or not.
As business leaders or owners, the more prepared we can be for unexpected events in our operation, the quicker we can recover and get back to business as usual. If you are unsure where to start, develop a depth chart for every job in your company as a starting point. Make sure you and your employees agree about who wants to move up the career ladder and who is content where they are. Putting the wrong person in the wrong seat is a great way to create added stress for everyone.
Regardless of where you are in the succession-planning process, taking steps to move forward is much better than standing still and waiting for something to happen. It is not a matter of if someone will leave your company—it is a matter of when. Will you be prepared?