Drafting a comprehensive succession plan is an effective tool used by most business owners to protect the stability of their organization. This can be accomplished alongside an estate plan or crafted independent of these other documents. Unfortunately, whether through bad advice, anecdotal evidence or learned in popular media, numerous myths could potentially disrupt your plans for effective succession planning.
Here are four common myths that business owners must identify and overcome when developing their own succession plans:
- Succession planning is only for the upper-level positions: Depending on the hierarchy of your organization, you might naturally tend toward the C-suite level or other business directors. In truth, succession planning is a tool that can be used to benefit all levels of your organization from identifying emerging leaders as they grow with the company to creating development plans focused on shoring up a department’s weaknesses.
- Succession planning is a finite process: Too often, a business owner will devote significant time and resources to developing a strong succession plan, and then stop. In truth, the succession plan is a living document. As new opportunities are identified or staffing needs change due to attrition at all levels, the plan should consistently be reviewed, revised and improved.
- Succession planning ends when the successor is named: When the former business owner leaves the organization and the successor is officially named, many believe the process has ended. While a significant portion of the plan might have reached its conclusion, there are numerous steps that must be carried out. The business transition process is complex, including providing vendor relationship data, key success factors, growth potential and future plans. Avoiding the “sink or swim” mentality when handing over the reigns to your successor is paramount.
- Succession planning is best kept behind closed doors: It is a mistake to make these decisions based on the vacuum of a conference room. Sharing plans and encouraging feedback from key stakeholders can lead to diverse ideas and a new approach to numerous problems.
Avoiding these myths and preconceived notions is crucial in the development of an effective business succession plan. Finding the right candidates, filling leadership positions and boosting the productivity of underperforming departments can all mean the difference between a successful organization or one that struggles into the future.