Effective Succession Planning - Succession Planning System

Effective Succession Planning - What exactly does that mean?

Business Success Tools uses several distinctions, three terms with supporting descriptions, that will help you identify the kind of effective succession planning that's right for you or your organization.

Backup Planning

Some business leaders make the mistake of thinking they are doing effective succession planning when in fact they are really doing something we call 'backup planning'.

We define backup planning as the process of identifying people in an organization who are best-equipped to serve as backups for current employees, should those people leave.

These 'backup people' need to be good enough to keep the business afloat until a more qualified job candidate is found and put in place.  Think of backup planning as a short-term way to keep work flowing when someone is out of the office for a relatively short period of time, several days to several months.  Backup planning is critical to any organization in supporting unexpected interruptions but should not be used as a substitute for intentional, effective succession planning.

Do you know someone like Carl?

Backup planning, by itself, leads to problems.  “I don’t know what happened to Carl", lamented a business owner recently.  "Carl used to be the best cost accountant we had. He was a model employee with a great attitude. He was so good, in fact, that when our top sales person retired unexpectedly, we had to move Carl into the lead sales position.  We even gave him more money.  But now he’s a different person. He doesn't perform the way he used to, he snaps at people all the time and his attitude is awful.”

What went so terribly wrong with Carl?

Chances are there is a 'job fit' issue with Carl.  Carl's not doing what motivates him anymore and it shows.  What often happens to the detriment of an organization and its backup people is that the person moved to a backup position is made the permanent replacement.  After all, if the backup can do an adequate job in the short run, why switch him or her back to their old job?  Over the long haul, organizations that rely on backup planning to fill critical positions on a permanent basis will suffer, as will those individuals in the backup positions.

Management Succession Planning

"Who will manage the company, both the technical and people issues, when those of us running the company leave?"

Businesses need a process for benchmarking critical positions, including management positions, and preparing suitable employees through mentoring, training and job rotation, to replace key players within an organization, in preparation for their departure or retirement.  This type of succession planning goes far beyond backup planning.

There are two divergent mistakes business leaders make when it comes to effective management succession planning.  Some assume it cannot be done.  Others think it can be done quickly and at the last minute.

Organizations need to create a pool of multiple candidates with high  potential to fill each key position and then devote time, attention, and on-the-job training to provide these candidates with experiences that build flexibility and talent.

Is there a hiring and/or development plan in place for grooming the next layer of management and people to fill key positions in your organization?  If not, why not?

Business Entity Succession Planning

Business entity succession planning involves planning for the smooth continuation and success of a business entity from a financial and legal perspective, once its key leaders leave, often through death or retirement, or decide to sell the business.

Proper continuation of the business entity from a financial and legal succession planning perspective can help prevent a business from being frozen and/or discontinued. It is essential to assess the risks to your business and examine available options, establishing goals for succession. 

Do you have a business entity succession plan in place and is it up to date?  If not, working with your financial and legal professionals (attorneys and accountants) to get proper advice and develop a written succession plan is essential.  It is necessary to explore what happens if an owner retires, becomes disabled or dies.  Does your business have the resources to carry it through?  Part of the planning should arrange for insurance, funding, allow for the transfer of ownership and actively manage the company's estate tax liability.

Effective succession planning requires using a logical approach, a succession planning system.  Learn more about implementing TriMetrix, a research-based management succession planning solution -   learn more about TriMetrix.

TriMetrix® has the tools and processes to support effective management succession planning.

Let us help you craft a solution that will work best for you and your organization.  Business Success Tools - contact us today.

© 2007 Target Training International, Ltd.

(The TriMetrix ® System is a trademark of Performance Benchmarking, Inc.)