Who is next in line for the throne – 7 Step Guide

Succession Planing is something that is not talked about nearly enough. Succession planning according to investopedia can be broadly defined as:

“Succession planning is a strategy for passing on leadership roles—often the ownership of a company—to an employee or group of employees. Also known as “replacement planning,” it ensures that businesses continue to run smoothly after a company’s most important people move on to new opportunities, retire, or pass away.”

The process is important no matter what type of company you own, work for, or operate. If you are running a small family business then you need to figure out who in your family has the ability to take over your business. If you are running a large corporation then it is important to have succession planning for nearly every exectuive position so that if something were to ever happen (death, retirement, left company, etc) you have a plan in place and you are not scrambling.

This process must be, proactive in nature, if you are caught off guard by someones leaving and you are searching for a replacement then you are already too late. I am going to run through some of the most common practices to perform a thorough planning process.

  1. You need to figure out what this person’s role is with the company and what the company will look like without them performing their role.
    • This allows for you to start building a TDK (Tasks, duties, & responsibilities)
    • It also allows for you to know how crucial their role is and how quickly it would need to be filled
  2. Start evaluating who could fill the shoes for this position.
    • Do not limit yourself with this search (John Spence once courted a future employee for ten years before actually having a position for him) The proper personal takes time to find, it is okay to be picky, and to start early
    • Explore employees at your company, colleagues, employees or owners of other companies, nobody is off limits
    • Evaluate what kind of training the possible candidates would need (Remember that just because somebody is a great salesman does not mean they would be a great sales manager. People far too often just look at who is next in line evaluate the candidate not their experience)
  3. Develop a plan for their succession.
    • This means outline everything on paper from tomorrow to 3 years from now (Nothing crazy but a simple blueprint or outline for how it will go down
  4. Once you have a good idea of who you think it could be open a dialogue with the successor.
    • Just because you think they would be good at the job does not mean they are up for it
    • Explain to them the process that you have drawn up
  5. If they are an internal employee you can begin training them.
    • Prepare them for certain aspects of the job that they have not been exposed to
    • Perhaps even hand over some of the responsibility to them as needed
  6. Lastly you will be taking a key employee off the floor and moving them to a different key position. Discuss with HR what you will be looking for ahead of time to replace the new successors.
  7. Final warning if you are a big company do not leave Successor Planning up to your HR department!
    • This is far too important a process and it needs to be handled by people extremely close to the candidates and processes (Nothing against HR it is simply above their pay-grade)

Again, as I mentioned earlier these principles apply to any size business. I recently was hired by a medium sized contracting company to find 3 possible successors (Outside of his current employees) to take over his company in just a few short years. And these are the steps that I followed. We had to evaluate the owners position in the company, what he did on a daily, weekly, monthly, yearly basis. After we new what the specifications were reached out to our connections to find candidates that may possibly fit the mold. From there we sat with the owners and developed a 3-5 year plan based on the candidates qualifications on how the succession would take place. Then we begin interviewing the candidates for the role and started the dialogue. Ultimately we were able to find 4 extremely solid candidates for the position of the successor to the owner. Both the owner and the candidates are thrilled with the opportunity.

Be proactive and start evaluating your company today.

Don't miss a blog post. Subscribe today!