7 Steps to Successful Business Succession Planning

Many business owners begin with a sense of establishing a legacy, an idea that will go beyond their lifetime. However, many fail to take proper steps to ensure their business lives long enough to become legacy. 

Succession planning is the strategic way business leaders replace every significant position, including CEO. In both corporate and family-run businesses, this takes vision, strategy, and proper testing. 

We've created a guide to successful business succession so you can follow simple steps to create a long-lasting company. 

Create Plans for Each Leadership Role

Every leadership role will eventually need someone new to take over. The more vital the position, the more carefully planned the succession needs to be. While C-level candidates are essential, so are any positions that will affect hiring new talent, developing and investing assets, and any who will carry the vision. 

By working off your organizational charts, you can answer the following questions:

‍If X position needed to be replaced in Y time, which of our current employees would be the best fit for these responsibilities?‍

‍What gaps in training need to be filled to ensure that transition?‍

‍Would that employee take the job if offered?

Establish Goals

After creating a succession draft from the previous step, you can identify action items. This may include interviewing top candidates about their future goals and their interest in training for leadership roles. 

There may be positions without clear candidates for them. Focus on hiring suitable talent long before they're needed so future leaders can grow within the culture and vision.

Research Candidates

It's challenging to select the best fit several years down the road from a pool of employees and potential candidates today. So-called obvious choices may excel at their position but lack intrinsic leadership or management skills. Others may hide in the background only because they have not had an opportunity to shine.

‍Understanding how to spot top talent is essential to a thriving succession plan. You can do this formally through job performance reviews, customer feedback, and from coworkers and managers. 

You can also gauge skills informally by spending regular time with employees during a typical workday. By watching them in their element, you may find hidden talent that could become the company's future.

Timeline for Professional Development

After defining your goals, it's time to match them to a realistic timeline. This process will determine whether a candidate will have sufficient training by the target date, create actionable goals for hiring talent, and give purpose to a growing organization.

Evaluate progress during the development timelines annually to ensure you stay on course. You'll also have time to address deviations from the plan.

Trial Run and Experimentation

Even the best plans often run into unforeseen problems– so testing out plans provides another layer of certainty. You can test your succession plan by slowly adding the responsibilities of the end position to the candidate's current job.

This way, you can identify any gaps in training and temperament and allow the candidate to determine their commitment and personal fit to the position. Although the trial run will undoubtedly take place after a significant investment of time and resources, it's still better to identify a misfit at this stage than after a complete turnover of the position.

Implement Long-Term Strategies

No company can create a legacy if employees and leadership are only focused on this year's profitability. Instead, your company needs to stand on a larger, shared vision to remain strong– particularly when changing hands in leadership. 

For example, Walmart was founded initially by Sam Walton. He had strong values that created shocking customer loyalty in a national chain and a reputation for treating employees with great respect. Now, decades later, new Walmart leadership has not maintained those values. As a result, while Walmart remains an industry giant, customers are no longer loyal to a vision but convenience. And employees that were once treasured file hundreds of lawsuits for workplace violations.

Everyone at your company must share your company's culture and vision, particularly those who will become future leaders. Otherwise, a great brand will deteriorate and eventually open up competition.

Hire a Business Advisor to Help

Planning the future of your company is complex, abstract, and ever-changing. As you fill one leadership position, you should already be several steps into planning their eventual replacement. And in family businesses, the problem of succession gets even more challenging. Not only do you have a company culture to maintain, but often family culture and expectations.

That's why thriving companies often hire business advisors to help manage succession plans. So partner with trusted business succession experts. We'll help you create a clear plan, maintain it, and create a solid future for your company.

Contact us for a consultation today!

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