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The Importance of Succession Planning

Posted by: Kathie Higginson
10/03/17

Succession planning is vitally important for ensuring the continued success of any business, in identifying and developing the talent which will fill your critical roles in the future, or in times of crisis. Organisations of all sizes are now focusing on succession planning to ensure the leaders of the future are in place. It would be very bad business to not succession plan for the future.

A strong succession plan can identify and put together an agenda to train and mentor the right people to step into leadership positions. Typically, businesses would put together short, medium and long term succession plans. Succession plans should also form part of a structured Business Continuity Plan.

It’s important for management, in particular directors and shareholders, to remember that a limited company is an entity on its own, it is not only the interest of the shareholders - all decisions should be made on behalf of the business, rather than the benefit of one or more invested parties.

Increasingly, succession planning should be a consideration not just for high-level senior managerial roles, but also for technical roles requiring a great deal of expertise. If there’s just one person in a business-critical position with the breadth of knowledge to keep that business moving – for example, a high level scientist or technical position – then this needs to be looked at too.

Succession plans, in particular for small and medium sized businesses, don’t need to be complicated or even formal, but the interested parties do need to know that they are involved and a plan should be put together to ensure they are in the right position to take the helm should the worst happen.

It’s worth considering that every internal move need not be upwards – it’s often prudent to move promising people sideways to enable them to learn the breadth of the business rather than just their niche part. Not only will this give them the tools they will need to take over, but also provide more senior management with insights on how that person deals with working outside of their traditional role.

In short, succession planning plays an important role in every business and should sit right at the heart of the organisation’s objectives, and is particularly prudent in a time where baby boomers are reaching retirement age – taking with them years of knowledge and working relationships, which can and should be handed down before they enjoy their well-earned retirement.

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