Whether someone has just started a new business or has assumed an executive role at a company, they likely hope to continue working there and helping grow the organization for some time. Owners and executives may commit years or even decades of their lives to the development of a brand, and their exit from these companies will often be a carefully-orchestrated process involving numerous stages to ensure a smooth transition.
Occasionally, even those who hope to work at a specific organization until they retire may find themselves leaving sooner than they anticipated. A sudden vote of no confidence by the board of directors or a health issue might force someone to leave the company and might even leave them incapable of guiding the transition process.
A succession plan is an important tool to help businesses successfully shift from one owner or leader to the next without any major interruptions to operations. When should companies have key talent create succession plans?
When they start in their new role
The best time to put a succession plan in place for someone’s exit from the company is often when they first begin their job. Requiring a succession plan as part of an executive or managerial contract has become increasingly common. Organizations often require an in-depth plan from new hires or those promoted internally within a fixed amount of time of taking over a role. Contractual requirements to engage in succession planning can eliminate resistance to the process and overcome the urge to procrastinate.
If there haven’t been any recent transitions
Shareholders, executives and even human resources professionals might recognize that an organization would benefit from having key players put together succession plans to help identify and train the person to take over their job when they exit the company. However, if the company has not had any major managerial or ownership turnovers in recent years, requiring a succession plan may not be an option. Those concerned about the future stability of an organization may need to broach the topic with those in leadership roles in the hopes of prompting them into creating plans before something happens that will interrupt the company’s operations.
Discussing succession plans before they are necessary can help protect a successful business from the harm often caused by unanticipated transitions.