Succession planning is easier said than done. Often the focus is on numbers and financial performance and the contribution of key employees is secondary. The best financial performance can be sidelined by loosing key employees and having to replace them with unqualified or risky candidates. Here are some tips to identifying and mentoring your best employees.
One: Define your key roles. Keep it simple. It is common to overcomplicate succession plans due to fears of losing key people, or by trying to accommodate employees in mismatched roles. Identifying the structure, roles, and employee qualities can simplify your succession plan. Start from the top and work down: what structure and roles would you want to be filled with the right person if you were buying your business?
Two: Review your talent. Do you have the right people in place to fill key roles? It’s important to know the career expectations of your top performers. Beyond career development, identify specific qualities and capabilities that new and rising employees need to showcase your business succession plan. Don’t wait. Start pulling in top performers and understanding their career expectations.
Three: Develop leaders. Beyond the ability to reach a quota, is the ability to lead the business going forward. Business buyers highly value key employees that can carry the business forward. But often a focus on short-term success can crowd out the difference between people who want to take on new challenges from those that simply want a raise. Understand the difference between each key role and start investing in the leaders. Leaders need time to grow into expanded roles and expectations.
More questions? Your Proforma Partners advisor can help with your succession planning.
Since 1987, Proforma Partners has facilitated smooth transfers of business assets that minimize operational impact to employees and customers, and are rewarding for the buyer and seller.
Stay tuned! Over the next months, we’ll blog extensively on succession planning best practices using our Value Builder methodology.
Goldsmith, M. (2009, May 9). 4 Tips for Efficient Sucession Planning. From Harvard Business Review: https://hbr.org/2009/05/change-succession-planning-to
Lanik, M. (2017). The 3 Most Common Succession Planning Mistakes. From Pinsight: https://www.pinsight.com/blog/59/the-3-most-common-succession-planning-mistakes-you-re-definitely-guilty-of-2
McCarthy, D. (2006 -2017). 10 Succession Planning Best Practices. From IVY EXEC: https://www.ivyexec.com/executive-insights/2013/10-succession-planning-best-practices/