Over the past three years, we have all learned that we never know what exactly is coming around the corner. A global pandemic has given rise to a business landscape that is continuously evolving and throwing up new challenges, but putting the right procedures in place can help your company to deal with these easily.
Planning for the future is a cornerstone of sustainable success and one element of this should be your company’s succession plan. Having one in place is not something reserved for large corporations, it’s essential for small and medium enterprises as well.
Below, we’ve outlined why having such a plan is so important and how you can create one with the help of a trusted business advisory services.
Why is a succession plan important?
A succession plan aims to minimise the disruption to a business’s operations during an unexpected difficulty. This could be anything from an unexpected staff exit to a change in the market. If we imagine that there is someone integral to a company, that manages teams and entire sets of responsibilities, and suddenly they are unable to work, then we can picture the chaos that would ensue. Confusion among staff and time spent rectifying this can delay projects, while instability and potential financial losses are also a risk.
Succession planning allows for the smooth transition of leadership in such a situation, helping the business to continue operating efficiently, which is vital to maintaining trust with clients, employees and stakeholders.
Retaining institutional knowledge
In Australian businesses, particularly those that have been around a long time, there is often a wealth of institutional knowledge that has accumulated over the years. This refers to ad hoc info outside of the formal training that employees have received, such as market trends, industry contacts, relationships between other competitors etc.
Without a well structured succession plan, this type of valuable information can get lost when key personnel leave. Your company’s plan should provide for the transfer of these insights so that your business can remain an experienced professional.
A well crafted plan will identify the key positions in the organisation and outline the skills, knowledge, competencies and experience required for each of them. This will mean the next generation of leaders within the company understand what’s involved in the roles and can be adequately prepared should they wish to progress into one.
Attracting and retaining talent
Having a clear succession plan in place demonstrates that your company takes employee growth seriously, something extremely appealing to ambitious job seekers. Outline the company’s structure, roles and what’s involved in each of them will help you to attract top talent.
This will also foster loyalty among existing employees. Showing them that there are opportunities to progress can boost morale and motivation and lead to higher job satisfaction. When they feel happier, staff turnover will decrease.
Preparing for the unexpected
Contingency planning is potentially the biggest reason why having a succession plan is vital. Unforeseen circumstances can play havoc with a company’s operations particularly when they relate to a long term absence or unexpected departure of a key staff member.
Creating a succession plan
There are a number of steps involved in this process and there are business advisory services who can help with this.
The first step is to identify key roles and personnel; these are the positions that are critical to the company’s operations and success. One identified, think about who is currently in the role and their circumstances, ask questions such as ‘are they nearing retirement?’
Regardless of the answer, you should think about who the potential successor could be for this role. Is there someone working underneath the incumbent who is very familiar with the job specifications or would you need to hire someone externally?
Develop a talent pipeline
This is an area where a business advisor can be extremely helpful. As an unbiased outsider, they can work with you to identify potential successors for key positions through conducting an employee and skill assessments. This may also involve providing training to a number of staff who have the potential to move into a bigger role or recruiting talent from outside the company or providing
Training and development
Business advisory services can help to devise training sessions that will help employees to develop their leadership skills. From previously identifying key roles and what skills are needed to succeed in them, the experts can tailor educational resources for your company’s needs.
These programmes can include mentoring, leadership, project management, conflict resolution and hard skill building.
Reviewing and updating
If your company is expanding, new projects, teams and roles may be created within the organisation. This growth is fantastic, but it may render parts of your succession plan redundant if the responsibilities outlined for one position have changed, or potential successors have already taken up work elsewhere.
It’s a job that can easily be forgotten or left on the back burner but a service such as Calibre Business Advisory can assist you in monitoring the progress of your plan and updating it when necessary.
While this may seem like a lot of information, having a succession plan in place is not only good practice, it’s a necessity. In a country where employee well being has become a priority, businesses that focus on this will be in a stronger position to secure future growth.
Partner with a reputable service such as Calibre Business Advisory to create the right programme and implement it throughout your organisation. We have an expert team of business advisors and tax accountants in Sydney, so you can trust us to create a robust plan that will work for you.