What is Succession Planning?
Succession Planning and Exit Planning are different. While a good Exit Plan does address many succession issues to help stabilize the company and increase value to a potential buyer, a Succession Plan focuses more on internal succession events and capturing key knowledge within the organization. While your accountant may address Succession Planning from a financial perspective and your lawyer may address it from a legal perspective, we address it from an operational perspective. A good Succession Plan will ensure that your business can survive any intentional or unintentional succession event. Here are a few succession events:
- Key employee retirement, death, or sudden exit
- Founder’s retirement or death
- Handing off business to son/daughter
- Sale of the business
- Merger with another organization
Any of these could be devastating to an organization if a leadership pipeline has not been built, key knowledge has not been captured, or processes have not been documented. Here are some of the items that a thoughtfully conceived Succession Plan will include:
- Strategic understanding of where the market and organization are going
- Present and planned organizational chart
- Roles, responsibilities, and KPIs (Key Performance Indicators)
- Process mapping
- Methods to capture key knowledge
- Risk assessment
- and more
A good Succession Plan will take several months to develop and will be a living document, much like a Business Plan, but focused on reducing risk through transitions that are guaranteed to occur in every business. Manley Strategic can help you develop this important document.