Tips for Effective Succession Planning

Succession planning can be a slow-moving and sometimes difficult process. While many business owners claim they look forward to days when they can retire to warmer weather, they often fail to create a transition plan. Often daily operational duties such as product development, process enhancement and employee issues take precedent over long-term planning concerns. This pushes succession planning to the back burner often for long periods of time. To help clients, prospects and others get started or reinvigorate their succession planning efforts; JLKR has provided a list of tips below, including:

  • Planning Ahead – It can be more comforting for the business owner if the succession planning process starts years before their actual transition. It’s also important because the more time spent shifting the core responsibilities of the business away from the owner, the better. To facilitate this process it’s necessary to document the core areas of responsibility. This will help segregate various aspects of owner’s responsibilities and create a clear vision for which tasks can be allocated to others as potential backups. It also provides clarity when searching for a successor on key tasks they will need to be able to perform. The more that is known about the role, the easier it will be to find a match.
  • Establishing a Timeline – Effective succession planning doesn’t happen overnight. It can take many years to understand organizational challenges, identify solutions and then get all the puzzle pieces to fit. The key is to establish a goal retirement date and then work backwards from there. Since things often change in business, it’s not essential for the date to be an absolute. However, a rather a flexible goal date that can change as needed is best. In our experience it’s best to set a date at least 4-5 years in the future for maximum planning time and efficiency. Working with the end in mind is the best way to approach succession planning and allows for the complex process to be “broken apart” into smaller pieces.
  • Identifying a Successor – It’s important to identify a successor as early in the planning process as possible. Without an identified successor, much of the work of succession planning is quite limited. Beyond this, the job of most owners is so complex that it may require a great deal of time to conduct training, introduce them into relationships and coach them through transition. In our experience, the best place to find replacement candidates is from within the company ranks or those who work inside the industry. Start the training processes as soon as reasonably possible. This will ensure a maximum amount of time to transfer organizational and other knowledge.
  • Being Open & Empowering – Once a successor has been identified there will be opportunity to share tasks or responsibilities. It’s not uncommon to see them approach a task or tackle a challenge in a way the current owner may not. Don’t be alarmed, it’s important to be open to the new ideas, processes and way of doing business that a successor can bring to the table. Open the door for them by allowing them to manage some existing responsibilities and make them part of the decision making process quickly.

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Succession planning is a complex process that can take years to complete. It takes commitment, discipline, dedication and a team of qualified advisors to successfully navigate the waters. If you have been thinking about starting or revisiting a succession plan, then JLK Rosenberger wants to help! For additional information please call us at call us at 949-860-9902, or click here to contact us. We look forward to speaking with you soon.