What would you do if a key employee handed in their notice tomorrow?
Successful business leaders plan ahead for eventualities just like this. If you’re running your own firm, or you’re in a leadership role, you’ll already be preparing for the ‘what ifs’ of life.
But in a small firm this preparation can be ad hoc and disjointed, constantly pushed aside by pressures of day-to-day survival. Chasing debtors and securing new sales feels more urgent than taking time to consider where the business might be in six months, or six years, time.
The danger of allowing the immediate to drive your agenda is that you’re reduced to being reactive. So when one of your key workers hands in their notice there’s a danger of spending the next 48 hours in a distracted whirl: assessing the impact of the loss; contemplating how you might tempt them to stay; weighing alternatives which could lead to snap decisions you later regret.
What is Succession Planning?
In its most basic form, succession planning is having some idea of who is going to step into the shoes of the key leaders in your business.
It doesn’t matter how small your operation might be, it still has at least one key leader. If you’re a sole trader, then it’s you. But if you’ve got a small team there may be one or two others who’ve got the drive, initiative and skills to be recognised as leaders.
If they’re any good, they’re unlikely to stay with you forever. And even you’re not an immovable object. Succession planning is about looking ahead and being prepared for change when it comes.
One day the most skilled person on your team is going to tell you they’re leaving. Maybe they’ve got a better offer, or want to change location, or they’re retiring. Whatever the reason, they’ll leave a gap in the ranks that could have a detrimental effect on your business.
If you’ve planned ahead and know how you’re going to replace them, you’re minimising risk.
Alternative Approaches to Succession Planning
It’s not just about replacing people. Here are some other issues to consider in succession planning:
- Is promotion an option? If you want to hold on to your best talent, give them room to grow. The ultimate is to allow them a stake in ownership of the business.
- People don’t need to replace people. Ways of working become entrenched over time. When a key person moves on, it’s an ideal opportunity to review working practices. Is there a better way of doing what they did?
- Consider a sideways move. It’s easy to focus on vertical progression but people often thrive when given a new challenge in a new area. Just because someone’s in finance doesn’t mean they can’t make a major contribution in another area, such as marketing.
What’s important is that you take the time to put aside the day-to-day demands of business, and look ahead. Investing a little time now could save you and your business from major shocks in the future.
Photo by christopher.woo. Published under Creative Commons license.