Making and maintaining profits is only part of a successful business.
Succession planning is one of the most essential components in maintaining a healthy business. And one that is often overlooked.
What exactly is Succession Planning? The APA Handbook of Industrial and Organizational Psychology defines it as the process of predicting and preparing for the replacement of staff within a business organization (Cappelli, 2011).
Organizations should use a succession plan to ensure a healthy leadership transition and maintain operations stability.
There are four crucial aspects of succession planning:
1.      Remembering the goals
2.      Identifying critical roles
3.      Retaining talent
4.      Evaluate and adjust the plan
Each of these is key to the success of a business during the transition.
1.      Remembering the Goals
The first step to having a good succession plan is to know why it is vital for a business to create one. Understanding the company’s objectives helps in developing the goals for the plan.
For example, some owners may grow a business to sell it. Others may want to expand their businesses to other locations. Either way, a succession plan is in place to maintain the company’s vision.
2.      Identifying Critical Roles
Secondly, managers should understand which positions are vital to maintaining operations and profitability. Determining which roles and skills are needed and knowing when a knowledge gap could affect or delay daily operations is imperative.
Understanding how vacancies impact operations is vital to plan for staffing shortages. To this end, management must thoroughly understand day-to-day operations and the key performance indicators within the process. Additionally, knowing which functions are vital for the business is essential. For example, if staff is limited in a specific area, the impact could be minimal, depending on the production demand.
3.      Retaining Talent
Next, it is vital to maintain the talent pool of an organization. Management should be strategic in identifying and nurturing talent from within. Ensuring that staff has equal access to training and leadership mentoring is essential.
Additionally, leaders should regularly interview employees to understand their goals within the organization, their retirement plans, and any other planned leaves. A well-developed succession plan also helps in planning for the employees’ transitions.
4.      Evaluate and Adjust the Plan
The final point is to evaluate the succession plan annually. Staff or needs within the organization may have changed since management implemented the plan. As the plan is reviewed and revised, the management staff should also assess operational changes, the number of staff, and the team’s skills.
In sum, a good succession plan should assess several factors of the organization, including remembering the plan’s goal, maintaining talent, developing leadership, and regular evaluation and adjustment of the plan. A succession plan strategy helps ensure the continuity of business operations.
To ensure your business remains strong and resilient during transitions, having a solid succession plan is essential. Let the experts at Cogent Analytics help you craft a comprehensive succession plan tailored to your unique needs. Complete the contact form below to start the conversation and secure expert guidance for a thriving future.
References
Cappelli, P. (2011). Succession planning. In S. Zedeck (Ed.), APA handbook of industrial and organizational psychology, Vol. 3. Maintaining, expanding, and contracting the organization (pp. 673–690). American Psychological Association. https://doi.org/10.1037/12171-019
