Want To Improve Your Company’s Value?
Make a succession plan and start executing it.
Your company is worth more to potential investors if it can be successful without you. Succession planning is the process owners use to ensure the smooth transition of leadership and talent, especially in a closely held private company that may be founder-based and never had a change “at the top.” When an owner(s) has never had another role, it helps to think of the company from an investor’s perspective rather than the person in charge.
What are some of the elements to get started?
- Leadership development program. Do you have a program to identify high-potential employees and provide them with leadership and development opportunities?
- Talent assessment. Have you started to assess your existing team for potential successors? Do you know who has potential for future leadership roles? Assessment includes performance reviews, competency assessments and 360 feedback.
- Key positions identification. What are the key roles to be filled for the company and in the next 3 to 5 years? These may be different than the roles you have now. For example, you may need a Controller or General Manager where you hadn’t in prior years.
- Succession candidates. Who are your candidates and how ready are they for future roles?
- Skill gap analysis. Do your candidates need to fill in some missing skills that can be developed with training?
- Mentorship and coaching. Have you been spending enough time with future leaders to know what their strengths and weaknesses are? Are you the mentor and coach?
- Career development plans. Do you have individualized career development plans with these high-potential employees, outlining their path to future leadership roles?
- Communication and transparency. Open communication about the process builds trust and engagement among potential successors.
- Performance metrics. Use KPIs (key performance indicators) to measure the effectiveness of the succession planning itself.
- Plan review. Review and update the plan annually to be sure it is still aligned with the company’s goals and needs. In a family business, coordinating ownership among the family and complex legal issues to be considered.
- Emergency succession plan. It is crucial to have a temporary plan in the event something happens before the succession takes place. Share this plan with the people who will be responsible for executing it.
- Knowledge transfer. Transferring important knowledge from exiting owner(s) to successors should be part of the plan.
You may already have some ideas about your potential successors and be aware of the “natural leaders” in your company. Putting a succession plan in place will help mitigate resistance to change and help employees understand the importance and benefits of supporting what comes next.
There are wonderful books and coaches who can help with your succession planning, including Harvesters! If you’d like to discuss your succession plan, or how to get started with one, and other topics about transitioning your business including readiness for sale, or other related topics, we’d be happy to have a confidential complimentary conversation with you about these or any other exit/sales/buying issues.
You can reach me via email: [email protected] or on my cell phone a: 224-688-8838.
We’re here to help you Harvest Your Potential!