Passing the Torch: How to Create a Successful Succession PlanSubmitted by Total Clarity Wealth Management, Inc. on June 2nd, 2021
It is extremely important to have a succession plan in place for your business in the case of an unexpected event. You need to know who is going to take over your business in the case you are unable to work anymore. While needing to execute a succession plan may be on the back burner, leaders and executives need to be preparing for the next step. Keep reading to learn more on how to create a successful succession plan.
Set timelines and plan your successors
Having a five-year timeline is a good rule of thumb when it comes to succession planning. Planning as soon as possible provides you ample time to make sure you address every detail. The earlier you plan, the easier you will be able to make any changes if necessary. The last year of your plan should be a specific and detailed transition period for you and your successor. Instead of choosing just one person to be your successor, it is a smart choice to have several candidates listed out. You can work to develop this short list of candidates with the skills and knowledge you want your successor to have.
Have conversations about leadership
You will want to have consistent dialogue with your short list of candidates to learn more about their leadership styles. Leadership is difficult and not meant for everyone so it is important to have confidence in your candidates that they will be able to take on your role. Take the time to develop your candidates to help them gain the skills and qualities you believe are necessary for someone to take over your role. Create opportunities for your candidates to get leadership experience. Also provide the ability to have awareness and critical thinking.
Plan throughout the organization
Succession planning is not just for executives. As senior leaders move forward into higher level positions, their previous position needs to be filled. Make sure to have a leadership pipeline fulfilled so you do not leave positions unfilled. By providing opportunities to gain leadership experience and develop their skills for all employees in an organization, you can create a successful succession plan.
Transition is key to properly executing your succession plan. There is a needed period of adaptation for the incoming person to deeply understand their position. Mentorship is important to help the new person feel supported and confident in their new role. Having a supportive team will make the transition easier as well. After a few months, the whole organization will be used to the new normal and everything should be running smoothly.
If you do not have a succession plan, begin planning as soon as possible. To provide a smooth transition, you must detail your plan and have chosen candidates. The sooner you begin planning, the more likely you are to have a successfully executed succession plan.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss. Investing involves risk including loss of principal.
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