How Businesses Effectively Develop Succession and Transition Plans

I’m not going to review all the scholarly research on these subjects, but let’s agree there is considerable research devoted to the topic of succession planning and transition planning in business, non-profits, and in government.  And it is very good research, just Google “nexus between succession planning and transition planning” and you will get at least 214,000 hits!  That’s a lot to review.  (Scholarly articles on the subject receive 36,100 hits).

Succession Planning – Really?

If we could proceed without regard to reality, it will make sense that every business (except those quite small) should develop succession plans, upward mobility, cross training, mentoring, and similar approaches to ensure that there is always talent at the ready to take over a more senior person’s role (often a baby boomer) when s/he decides or needs to move on.

Certainly, there are businesses that can do this effectively, and it is their reality.  For the most part however, most smaller businesses lack the luxury of time and resources to develop a transition and a succession planning process that enables the orderly transfer of business leadership.  That is, they are working “in” not “on” their business.  Easier said than done.

Reality Perspective

A more typical plan for succession (with or without the thought of conscious transition) is to think about finding a replacement for the owner(s) or C-level executives when these leaders are approaching the traditional retirement age of 65 or beyond. Note that the actual process has not begun.  The first step is “thinking about it.”  Next, there may be a conversation, honest, I suspect, between valued advisors and the owner/leader, about the need to develop a succession plan.

Strategic Organizational Analysis

The critical next step – determining what the organization needs from its next group of leaders is best accomplished, in my opinion, by conducting a thorough, strategic organizational analysis that should include a review of:

  • Human resources,
  • Sales and marketing,
  • Business operations and planning,
  • Accounting and finance,
  • Information management,
  • Business continuity,
  • All related ancillary reporting relationships and functions, and which
  • Examines current strengths, weaknesses, opportunities, and threats to the business.

What’s Next?

This present state organizational analysis can provide the business a good snapshot of the types and kinds of professionals required to accentuate its strengths, mitigate its weaknesses, leverage its opportunities, and reduce the threats to the business.

It can further identify the type and kind of organizational structure the business needs to change into to enhance its ability to transition – understanding that the challenge will be adapting to a moving, changing target – the competitive environment, enhancements in technology, changes in product and service mix, changes in effective marketing and sales strategy, and the ever-changing talent requirements to fulfill these other needs.

An effective succession strategy and plan needs to recognize and respond to these changes. The above recap may sound oversimplified.  My experience is that the organizational analysis becomes central to enabling a business to develop both an effective succession and transition plan.  In these instances, I’m reminded of my guide:

“The difficulty of the effort does not justify its dismissal.”

When a business needs to develop effective succession and transition plans, preparation and planning should always precede proper execution.

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