Does your business planning include a legacy strategy?

Let’s talk about succession planning

As soon as we emerged from the pandemic, I noted that businesspeople were re-evaluating.

Owner managers appeared to question their passion for their business, with some looking to retire sooner than once anticipated, pass the baton on to family, or seek a full MBO.

Others discovered long-time employees/key talent were keen to move on, or the business had outgrown them. And, with no natural successor in place, this left the business vulnerable.

In the midst of this, many younger ambitious staff were thinking: “What’s the route to progression for me here?”

Those questions are all pertinent to one topic – a topic that often gets treated as if you’re about to discuss will writing.

That’s succession planning.

Often, it’s assumed that the only person needing to think about succession planning is the family business owner, who might at some stage want to pass down the responsibility and legacy to a relation.

Not so.

Succession planning should be a key thought for every organisation and every leader. It is all part of the contingency planning that we all need to do and ensures you continue to nurture, develop and retain talent in your business.

If you don’t, then in the absence of nothing being said, people may start to see how green the grass may be on the other side.

When thinking about succession planning, remember this is an ongoing process in your business. Ultimately, it allows you to:

1. Avoid the panic of receiving an unexpected premature retirement or resignation from a post you see as critical;
2. Be ‘talent management focused’ and continually assess and provide appropriate training and experience for those in the business you see as likely to fill particular shoes; and
3. Be aware of the balance in having an appropriate future mix of outsiders and internally promoted staff when filling roles.

While it can be an area that fills a business owner or manager with  fear or dread, we find, without fail, those owners/leaders who have been focused on the future and applied effort achieve much better results. The process enables them to feel in control, spot opportunities, feel more enthusiastic about the prospect of changes ahead, and give team members more confidence about the future, coupled with a sense of recognition and value in their contribution to the business’s success.

Modern succession planning means exploring multiple routes to resourcing whilst maintaining a culture which respects diversity, openness, and agility in the face of change. 

It’s always great to talk regularly about your team member’s performance and potential. You must ensure that you can consider this as part of your broader people plan and any learning and development activity you want to invest in ahead of time.

It should be noted that you do need to exercise caution when talking to your team about their plans. You must demonstrate appropriate expertise to facilitate this conversation legally, ethically and effectively for everyone. The last thing that you would want to face is a discrimination claim. 

Even with your leadership team, it’s not always appropriate to leap into succession planning without further specialist resources or input, if only to act as a critical friend to clarify your thinking and minimise the risks to your business.

Whichever route you decide for your succession planning, remember it’s not an area to be rushed or underestimated. Your decisions today will undoubtedly have an impact – of a greater or lesser degree – on so many.

TOP TIPS

• Maintain a healthy watch on what posts you think will be most impacted by exits and changes and focus on these as areas to concentrate succession planning.
• Create an environment for open and honest conversation in which employees feel able to talk to you about plans to move on or retire. The more they feel able to give you that information well in advance, the better prepared you will be.
• If you’re a business owner and in danger of putting your head in the sand about your own succession intentions, remember that allowing yourself at least ten years of thought and planning is wholly appropriate. You need time to talk through and plan with all concerned.
• Drop the assumptions. One of the worst things we see leaders do is when they say: “Well, I thought John would stay until he was at least 65.” People think differently now about work/life balance and want to achieve more with their latter years. This is particularly the case post-pandemic, as more of us thought about the purpose of our lives and the quality of our time with loved ones. Equally, plans change, so an ongoing dialogue is vital.
• Invest more in talent management and consider how high performing team members fit into your entire succession planning approach. Look at ways they can be nurtured and how they can secure a broader knowledge of the business. You could be missing opportunities.
• Challenge your own control-freak tendencies. If you do think you are someone who finds it difficult to ‘let go’ in business, look at how you can use others within your organisation to aid you in looking more broadly at what an effective succession strategy might be for all concerned.
• Tread gently with all family succession matters. You want to ensure that you can still enjoy a Sunday lunch with the extended family whilst also protecting the income that the business may need to generate to support the family. It is possible that this may not be best achieved by a successor from the family.